On the pavements of London, the battle lines are drawn between newspaper giants

One is the world's most powerful media tycoon; the other is the head of Britain's pre-eminent newspaper dynasty. And when London's new evening tabloid, TheLondonPaper, is launched, the two are expected to go head to head in a vicious and increasingly hostile circulation war on the pavements of the capital.

The battle will pit Rupert Murdoch, the Australian media tycoon and a long-standing scourge of the establishment, against the Fleet Street magnate Jonathan Harold Vere Harmsworth, the fourth Lord Rothermere.

Associated Newspapers, publisher of the Evening Standard and Daily Mail, opened hostilities yesterday with an aggressive pre-emptive strike against Mr Murdoch's forthcoming launch. In a carefully managed announcement, the company revealed plans to distribute London Lite, a new free evening paper, to 400,000 commuters in central London. It also plans to relaunch the Standard's This is London internet site.

The new titles - which involve investments of millions of pounds - will be in contention from the middle of next month. Murdoch's News International has already decided to launch TheLondonPaper on 19 September.

Mr Murdoch has been planning his launch for more than a year, and hopes to eat into the Standard's fragile circulation, which recently recorded a 19 percent year-on-year fall to 300,000.

"We have done countless bits of market research, and the feeling is that the Evening Standard has lost the support of Londoners," said a source at News International. "People feel that it is full of doom and gloom and does London down. TheLondonPaper has been designed as a direct contrast. It is aimed at younger readers, and is colourful and upbeat.

"This will be Rupert Murdoch's first-ever UK newspaper launch, and he's not going to let it fail. We've done our groundwork, and intend to make it work. In the past, Rothermere's only competition in this market has been from people like Robert Maxwell. Rupert is a completely different prospect, and intends to hurt him. Regardless of this new title, he has no intention of going away."

News International's free paper is to be edited by The Independent's media columnist Stefano Hatfield and will employ a combined editorial and advertising staff of about 70.

Associated Newspapers is keeping details of its new title under wraps, although the editor is expected to be the former Daily Mail executive Martin Clarke. Last year, he launched Standard Lite, a slimmed-down lunchtime version of the Evening Standard, which will now be scrapped. Other staff moves have yet to be announced, but the paper is believed to have hired another veteran Mail journalist, John McEntee, to edit its gossip column.

Both London Lite and TheLondonPaper will initially be distributed by hand. But the two titles are also battling to secure important contracts to distribute through mainline and London Underground stations.

The free morning paper Metro has exclusive rights to distribute via stations until 2010, but a recent ruling by the Office of Fair Trading means access to the afternoon market will be widened next year.

The success of Metro, which was launched in 1999 and now boasts a circulation of 900,000, has led to widespread speculation that the age of the paid-for newspaper could be on the wane. But Associated Newspapers last night denied speculation that London Lite will eventually replace its paid-for sister title, which has been losing money for the past five years.

The Evening Standard editor Veronica Wadley hinted yesterday that her newspaper would reposition itself as an upmarket title. It is expected to increase its cover price from 40p to 50p next month.

"We intend to build on the Evening Standard's great reputation for news and quality journalism," she said in a statement. "The paper has the highest number of AB readers of any newspaper in London, and the largest circulation of any national paper in the capital with the exception of the Daily Mail. If you want to know what's really going on in London, you must buy the Evening Standard."