The London Paper, News International's London freesheet, has lost almost £17 million in its first 10 months of publication; the turnover for the period was £8 million, the Guardian reported Friday.

Launched in September 2006, The London Paper recorded a pre-tax loss of £16.8 million during the year ending in June 2007.

Launching costs and ad sales caused the losses; however, the newspaper is expecting better ad sales this year, Newspaper Innovation reported.

The London Paper is given out evenings of every weekday throughout central London, it has a distribution of around 500,000 copies a day, opposed to London Lite's 400,00. London Lite is owned by Associated, part of the Daily Mail & General Trust group.

Following the freesheets' launch, they immediately witnessed a large drop in sales. Peter Williams, DMGT's finance director, told the Guardian that the evening freesheet market was overcrowded.

“It's difficult to see how the market can sustain two free afternoon newspapers that are very similar,” he said.

However, according to analysts, the two newspapers' owners are unlikely to pull away from the market even though they are experiencing losses , as “there are higher strategic objectives to consider,” the Guardian report stated.