This is no time to write off the 'Obs'

Its editor has just resigned amid talk of 24/7 online integration – but, for a paper which is 216 years old, that hardly constitutes a crisis

When, on a fine May morning 14 years ago, The Observer's assembled journalists were addressed by their new owners – represented by the late Hugo Young, chairman of the Scott Trust, and Peter Preston, then Guardian editor – Alan Watkins, the paper's veteran political columnist (now of this parish), whispered to me: "They're like a conquering army – I'm off."

In practice, the Guardian Media Group has not acted like a conquering army; given The Observer's substantial losses over the years, it could be said that it has acted with surprising restraint. What concerns media-watchers now is whether the sudden exit of Roger Alton, The Observer's award-winning editor, marks the final ascendancy of The Guardian over its sometimes rebellious Sunday sister and whether the 216-year-old paper will now be treated as a seventh-day appendage to the daily. The Scott Trust, in a statement about Alton's departure, said The Observer should retain its distinctive voice. The question being asked by the paper's journalists is whether this will be possible in the face of the apparently unstoppable advance towards 24/7 online, multi-platform newspapers, especially when the two titles move into shared new premises next year.

It is hard to believe that Alton's departure is unconnected with a perceived threat to the paper's independence. It is an open secret that there have been jealousies and resentments between the two papers and their respective editors. Alan Rusbridger brings a more cerebral, strategic approach to editing The Guardian, compared with Alton's hands-on, excitable, sometimes manic style. It is rumoured that Alton nearly resigned several weeks ago when Rusbridger first took his "integration project" for the two papers to the Scott Trust. The Observer's journalists have been troubled by Rusbridger's reported remark that "there needs to be an adult discussion as to why The Observer needs a quarter of The Guardian's staff to publish once a week".

Last week's drama, while doubtless unsettling to Observer journalists, has to be seen in perspective. The paper's immediate demise was regularly predicted during my 18 years as editor, and it changed owners three times in that period. It is now on its fifth editor since I left in 1993, so another change in the hot seat – from Alton to his long-time deputy, John Mulholland – hardly constitutes a major crisis. The Dubliner is a popular choice – thankfully, The Guardian hasn't parachuted in an outsider or appointed one of its own.

It was touch and go in 1993 whether The Observer would be sold to The Guardian or to The Independent. It was only being sold at all because Tiny Rowland was losing control of Lonrho, the paper's owner since 1981, and no longer had the power to defy his board, which had never wanted it in the first place. It made little difference to Lonrho which of the prospective suitors should be favoured. The Observer's journalists preferred The Guardian as their saviour, mainly because they feared that the paper would otherwise be swallowed up by the newly arrived Independent on Sunday.

The counter-argument was that a merger of this newspaper and The Observer would have created a more powerful rival to The Sunday Times and Sunday Telegraph. In the event, the journalists won – largely because Rowland was personally won over by a written plea from them.

Had I been asked at the time (which I wasn't), I would have suggested a closer, cost-saving integration of the news, sport and business sections of the two papers, while allowing the Sunday to retain its distinctive columnists and separate editorial voice. This is apparently about to happen now and involves such a fundamental shake-up in staff that Alton thinks that a new man should take on this daunting task of reconstruction.

I was surprised it didn't happen 14 years ago, even though the then deputy editor of The Guardian, Jonathan Fenby, was given the Sunday. He was a former Reuters correspondent, a daily paper man, and he set about making The Observer as different as possible from The Guardian. Oddly enough, I proposed in print at the time that Rusbridger himself, mainly a features man, should edit The Observer as part of his training for the top job at The Guardian. In retrospect, that looks like a sound piece of unheeded advice.

Fenby was succeeded by Andrew Jaspan, brought in as a hard man in the mould of Andrew Neil, with a brief to knock The Observer into shape. He was seen off easily by The Observer's canny old guard and gave way to Will Hutton, an original policymaker but not a hands-on editor. Finally, nine years ago, they turned to Alton, a Guardian man who had done some Saturday work for The Observer – I had earlier tried and failed to appoint him as sports editor and editor of the Colour Magazine.

Alton's problem has been that he made such an editorial success of the Sunday, especially the launch of the Berliner-style format, that he became virtually immune to Guardian pressure – until now, that is. It must be the only time an editor has ever quit while circulation is rising and his paper is the current holder of the Newspaper of the Year award.

Comparisons have been drawn with the recent departure of Patience Wheatcroft from The Sunday Telegraph. She, too, appears to have been sacrificed on the altar of an integrated, online, seven-day operation. Are we to conclude from these two cases that the days of the separate Sunday newspaper – essentially a British institution, after all – are numbered? Personally, I doubt it. Seven-day editorial operations have been tried before and have always failed. A Sunday paper performs a different function from a daily – The Observer journalists think The Guardian management have never properly understood this. They were evidently surprised to learn from recent research, commissioned from McKinsey, that the Observer brand is critical to the Guardian's business model. "We could have told them that without wasting thousands on consultants," an Observer man remarked wearily.

Will these changes damage The Observer? Not necessarily, in my view, as long as The Guardian understands the essentially different nature of a Sunday newspaper and doesn't make The Observer staff feel they are bending the knee. Alton will be a serious loss, but Mulholland has already proved himself a capable successor by producing those splendid magazine supplements that have been an important ingredient in The Observer's recent success.

A central issue is likely to be Rusbridger's conviction that newspapers must put their scoops online without waiting for the next day's paper. That was a brave call for the daily and has been vindicated by the fact that other newspapers are then required to give due credit to the source. But Sunday newspapers live or die by their front-page scoops and the sales effect they have on the news-stands. What will the Observer news desk do if it gets a scoop in mid-week and is required to make it immediately available online? To me, the answer is obvious and is the key to future relations between the daily and the Sunday: the decision must be made by the editor of The Observer, not as part of some overriding group policy. Or he won't be the editor at all.

Roger Alton

Resigned as editor of 'The Observer' last week, despite it being on a circulation high and the reigning Newspaper of the Year, after disagreements with 'The Guardian' over integration of the two papers

Alan Rusbridger

'Guardian' editor; has had a tough relation-ship with Alton. His paper attacked 'The Observer' for its coverage of the McCanns and its support for the Iraq war

Nick Davies

'Guardian' journalist and Rusbridger friend. Press reports said his book 'Flat Earth News' linked Kamal Ahmed with writing or editing with Alastair Campbell the dodgy dossier on the case for war in Iraq – claims denied by Davies and Ahmed

Kamal Ahmed

Fearsomely ambitious executive editor, news, of 'The Observer'. He resigned this month to become head of communications for the new Equality and Human Rights Commission. The move took his colleagues by surprise

John Mulholland

Roger Alton's deputy for almost a decade, he takes over as editor in January. A safe pair of hands, but with great flair, he will be the first Irishman to edit a British national newspaper

Donald Trelford was editor of 'The Observer' from 1975 to 1993, and is emeritus professor in journalism studies at the University of Sheffield