It is understood that associate editor William Lewis, who is overseeing the Telegraph's move to new London headquarters in Victoria, is keen to trial a tabloid edition in the South East, as part of the paper's broader plans to "digitally reinvent" itself.
The paper, which is owned by the Barclay brothers, is currently in the process of developing a multimedia newsroom that it expects to go live over the next few months.
The development would allow journalists to file stories suitable for television, radio and print formats under the Telegraph masthead.
The Telegraph's proposed tabloid edition has been codenamed 'Project Raglan', after Lord Raglan who commanded British forces during the Crimean War.
The name Raglan was chosen because the paper was founded in 1855 by political campaigners who opposed Britain's involvement in the war most famous for the Charge of the Light Brigade.
The Telegraph will now aim to trial a tabloid format, which could feature content from its broadsheet edition, on a regional basis at some stage by the end of the year.
The move mirrors that of The Times, which trialled a tabloid edition alongside its existing broadsheet design before making the switch.
Exact dates and costs for the trial have yet to be confirmed, but it is understood that the paper is keen to develop the venture now that the groundwork has been laid.
In the latest ABC figures, the Telegraph maintained a level circulation, up just 0.02% to 900,236.
A spokeswoman for The Telegraph denied the reports: "The Telegraph has no plans to launch to a tabloid edition", she said.
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