A lot of mainstream investors are relatively wary of investing in porn

Stock market analyst

But the move will also be seen as an attempt by Mr Desmond, who owns celebrity title OK!, to distance himself from the pornography business.

The 'top shelf' titles have made Mr Desmond the focus of much criticism since he took over the Express group last year, with some MPs questioning his fitness to run national newspapers.

Financial motive

The Express group's chief rival, Associated Newspapers, publishers of the Daily Mail and Evening Standard, has attempted to make public relations capital out of Mr Desmond's other business interests.

But most analysts believe the sale of the adult titles is a purely financial move. The sale does not include The Fantasy Channel, Northern and Shell's adult cable television channel.

Mr Desmond, who borrowed �97m to buy Express newspapers, has said he wants to invest a 'significant' amount in the Express in an effort to take on The Daily Mail, the clear mid-market UK leader.

Simon Wallis, media analyst at West LB Panmure, says: "Northern and Shell's pornographic titles are profitable but they are not actually that big. They only generate about �20m worth of revenue a year.

"They could also be something of a liability, because a lot of mainstream investors are relatively wary of investing in porn."

Mr Desmond plans a revamp of the Express titles

The market for 'top shelf' magazines is also changing, with mainstream newagents becoming increasingly reluctant to stock them.

As the owner of OK!, Mr Desmond succeeded in turning a loss-making title into the market leader by paying out huge sums for celebrity exclusives, such as the �1m reportedly spent on David and Victoria Beckham's wedding.

Stan Myerson, group managing director of Northern & Shell, said: "It has always been clear to the Northern & Shell board that once we were committed to the future of the Express titles and the Daily Star, our adult titles and associated websites, which represent 5% of turnover, would not be regarded as part of the future of this media group.

"We are hopeful this matter will be concluded in due course."

Express re-vamp

Northern and Shell is believed to be planning a major revamp of the Express titles.

The format of the newspapers is to be changed, with an extra inch being added to their page length to match The Daily Mail, according to sources.

The revamped Sunday Express will be the first to hit the news stands, on 7 February, with a more glossy, larger format magazine and a tabloid business section.

Mr Desmond has said he wants daily sales of the Express, which have sunk to a little more than 1 million copies to eventually overtake The Daily Mail, which sells about 2.5 million copies.

One analyst said: "He faces an uphill struggle. People are worried about advertising revenue, the price of newsprint is going up and he is fighting a highly popular, entrenched competitor in The Daily Mail."

Cost cutting

Mr Desmond has embarked on a savage cost-cutting programme since taking over the Express titles.

It emerged on Wednesday that staff at the former Express websites believe they will not receive any redundancy pay after the sites were put into liquidation.

The websites were sold with the Express newspapers.

But since then SP Investments, a vehicle set up by Seymour Pierce Stockbrokers, bought the websites for �1, with the purpose of finding a buyer for the businesses.

There will be a meeting with creditors on 19 January, joint liquidator Patrick Wadsted of HLB Kidsons, said.