News Corporation could offer as much as £1 billion for the Penguin Group as it prepares to offer a bid that could end the Random House Penguin merger.

The success of such a bid would see the book giant join News Corp’s existing publishing arm including HarperCollins.

The announcement of a merger of Penguin and Random House was put forward as a defence against the dominance of digital publishers including Google, Amazon and the rise of the e-reader.

Either deal would involve competition commissions due to the scale of businesses involved.