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The ruling by Delaware's Court of Chancery could allow Hollinger International to press ahead with the auctioning of its papers, including the Daily Telegraph, The Chicago Sun-Times and the Jerusalem Post, to the five bidders in the race for the titles.

Vice-chancellor Leo Strine ruled that Black "breached his fiduciary and contractual duties" and issued an injunction preventing the mogul's sale of a majority stake in Hollinger Inc, the holding company he uses to control Chicago-based Hollinger International, to the Barclays.

In a 130-page ruling, Strine wrote that Black "repeatedly behaved in a manner inconsistent with the duty of loyalty he owned the company," and misled the board about his dealings with the Barclay twins, who also own The Scotsman newspaper and the Ritz hotel in London.

Hollinger International issued a statement following the ruling that called for Lord Black and Hollinger Inc to "respectfully agree" with Strine's ruling. There was no immediate sign of an appeal from Lord Black.

The statement said that Hollinger International looked "forward to the prompt and effective pursuit of [investment bank] Lazard's work and to the presentation to International and Hollinger of a course of producing value superior to that presented by the Barclay's tender offer for Hollinger [Inc] and proposed bid for International".

Lord Black accepted a £248m offer for Hollinger Inc from the Barclay twins but Hollinger International sued to block the sale. The company also introduced a "poison pill" plan with the intention of diluting Lord Black's stake. In response Lord Black filed a counter claim attempting to block that move and the two companies met in court last week.

Bidders for the Telegraph group include: Express newspapers owner Richard Desmond; and former owners of the Telegraph, the Berry family, who are thought to be bidding alongside the Daily Mail & General Trust and Cinven. Three private equity firms -- 3i, Candover and Apax -- are also in the running.

Reports suggest that most of the bids have come in at around £550m to £600m.

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