Rival bidders include Sir Paul Marshall, the hedge fund magnate behind GB News, which has the support of Republican billionaire Ken Griffin and is also the forerunner to buy The Spectator.

David Montgomery, the veteran newspaper chief who owns titles such as The Yorkshire Post and The Scotsman, has also advanced to the second round, although it is not clear how he would fund any bid.

Two unidentified foreign investment groups are also believed to be in the works.

Lord Saatchi, the former advertising magnate, was rejected after submitting an offer of £350m.

Belgian publisher Mediahuis was also knocked out after the first round of the auction, while Lord Rothermere, owner of the Daily Mail, ruled himself out due to concerns. any bid would face significant regulatory scrutiny.

RedBird IMI, which is majority-backed by the United Arab Emirates, was forced to put The Telegraph up for sale after ministers intervened to block its takeover over concerns about the impact on press freedom.

The fund had derailed the initial auction process after striking a deal to repay debts of around £1.2bn owed to Lloyds Banking Group by previous owners, the Barclay family.

A spokesman for Johnson declined to comment. Zahawi did not respond to a request for comment.