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The New Zealand Press Association's future is uncertain after a major shareholder gave notice it would withdraw from the co-operative news service.
NZPA chairman Michael Muir yesterday issued a statement confirming Fairfax's withdrawal from the 131-year-old news service had prompted a review.
NZPA staff would be consulted and their feedback considered before a final decision was made at the end of the month.
"Fairfax has been reviewing its own bureau structure for some time and no longer needs the NZPA service," Mr Muir said.
In response, Fairfax's main rival, APN, announced it would establish a new national news service to "counter the Fairfax move", its chief executive Martin Simons said.
"We will have discussions with key NZPA staff and work with New Zealand's independent publishers to tailor a news service to meet the nation's content needs."
The Otago Daily Times already shares content with APN titles such as The New Zealand Herald. This alliance was important to strengthen the company's South Island bases in Christchurch and Oamaru, Mr Simons said.
Until 2006, New Zealand newspapers shared stories through NZPA, but commercial tension between Fairfax and APN forced NZPA to become an independent news source.
Allied Press managing director Julian Smith said, depending on the review, it was likely Allied Press, which publishes the Otago Daily Times, owns numerous southern community newspapers and has an interest in the Greymouth Star, would join the APN-led service.
The new service would be more like NZPA's original model of newspapers sharing all content and could lead to an improvement in quality, he said.
"Hopefully, out of this the ODT will be stronger."
Mr Smith was saddened by yesterday's development: NZPA had a proud history, and a special link to Dunedin.
The co-operative had its genesis in an "innovative approach from the ODT of the day", Mr Smith said.
Fairfax, which publishes the Dominion Post, the Sunday Star Times and The Press in Christchurch, issued a statement last night saying it was withdrawing because NZPA had failed to offer it a news service fitting its needs.
Fairfax New Zealand chief executive Allen Williams said he expected more competition between media organisations as a result of the change.