Mohamed al Fayed and Northern Rock share the billing in the papers this morning.

Job losses and £100m fees-1st day at the Rock says the Times

Taxpayers face a £100 million bill from City lawyers and bankers for the failed auction of Northern Rock, it emerged last night, as staff at the bank were bracing themselves for sweeping job losses and branch closures.
Rival banks, investors and hedge funds all went on the warpath in protest at the Government’s decision to nationalise the Newcastle-based bank, threatening to drag the issue out further in costly legal battles.

Thousands of jobs to go at the Rock says the Guardian

Alistair Darling was braced last night for heavy job losses at Northern Rock in the coming months as the government came under pressure from the European commission, UK high street banks, the company's shareholders, and trade unions over the nationalisation of the Newcastle-based lender.
While fending off Conservative calls for his sacking, the chancellor accepted that the Treasury's rescue plan would fall foul of Europe's strict rules on state aid unless the new management team reduced the size of Northern Rock's business.
Ron Sandler, the new chairman of Northern Rock, told staff yesterday that the bank would remain in state hands for several years but would shrink in size after its rapid expansion in the past decade

The Telegraph says the deal could cost each of £3500

Taxpayers' exposure to the beleaguered bank has doubled since the beginning of the year and now stands at about £110 billion - more than the annual budget of the NHS and the equivalent of 27p on the basic rate of income tax.The newly-installed chairman has been forced to admit that the bank may remain in public hands for "years" - undermining claims by Gordon Brown that the nationalisation was only temporary.

Northern exposure says the Independent

Westminster and the City of London came to terms with the rejection by the Government of two private-sector proposals for taking over the bank and amid calls by the Conservatives for Northern Rock to be taken into public administration. The Government also faced fresh embarrassment over the £110bn nationalisation after it emerged that millions of pounds may have to be paid to Sir Richard Branson's Virgin group because of delays in reaching a decision over the banking debacle. The taxpayer is expected to have to underwrite a hefty fee to the preferred bidders Virgin and Olivant, who dropped out of the race at an earlier stage, and the Government's City advisers, Goldman Sachs.


The papers have gone to town with the coverage of the Diana inquest

The Express leads with

Prince Philip and Blair ordered murder

PRINCE Philip and Tony Blair ordered the murder of Princess Diana in the “crime of the century”, Mohamed Al Fayed sensationally claimed yesterday.
Branding the Royals a “Dracula family”, he said the plot was engineered to prevent Diana marrying his Muslim son Dodi and to clear the way for Prince Charles to marry his “crocodile” wife Camilla.
He claimed that senior members of the Royal Family, with Mr Blair’s sanction, or­der­ed MI6 to plan Diana and Dodi’s assassin­ation in a 1997 Paris crash and were helped by a whole string of senior politicians, British and French police officers, judges and others to carry out and then cover up their plot.


Horribilis says the Mirror describing how

In a bizarre five-hour performance before the Diana inquest he branded Prince Philip a "Nazi" and a "racist", Camilla a "crocodile" and the Royals a "Dracula family".

Has he gone off his Fayed asks the Sun

Dabbing his eyes with a handkerchief, grieving Mr Fayed said Prince Philip was a Nazi racist who did not want Diana, 36, to wed his Muslim son Dodi, 42.
In a tense exchange with Ian Burnett QC, counsel to the inquest, Mr Fayed said Prince Philip, 86, was “behind the assassination” and the Prince of Wales “participated”.

I'm not mad, insists Mohamed Al Fayed says the front page of the Mail

Insisting that he was not "mad", Mr Fayed appealed to the "ordinary people" of the jury to support his stand against the "murderous forces" of the British Establishment.
All you had to remember was one thing. Mohamed Al Fayed was telling the truth and everyone else was "talking baloney".

The Guardian reporting

Shortly after Tony Blair and Robin Cook had been added to Fayed's list of conspirators, Richard Horwell QC, a note of incredulity rising in his voice, said: "So that's MI5, MI6, the CIA, the DGSE - the French intelligence service - Judge Stephan ... the French ambulance service ... Lord Condon, Lord Stevens ... Mr Burgess, the Surrey coroner and Lady Sarah McCorquodale?" He could have added several more: two bodyguards; the French pathologists; a photographer called James Andanson, who was allegedly driving the white Fiat Uno that brushed against the Mercedes shortly before it crashed in the Alma tunnel in Paris on August 31 1997; Henri Paul, the chauffeur; a reception clerk at the Ritz hotel; Sir Michael Jay, the then British ambassador; Sir Robert Fellowes, the Queen's private secretary, who was Diana's brother-in-law; Lord Mishcon, her solicitor; and - of course - Prince Philip and Prince Charles. Time and again, Fayed answered: "Definitely."

The Mirror reports

Beheading fanatic Parviz Khan taught sons: This is how you slit the throats of your enemies

An islamic fanatic jailed for life yesterday for plotting to behead a British soldier was training his sons aged seven and five to slit the throats of "infidels".
Parviz Khan, 37, was secretly taped at home telling Ibrar, five: "What do you do with these people? How do you kill them? Cut their neck. Show me."
The dad of four was heard praising his son for making a throat-slitting gesture, telling him: "Good."

Beheading plot leader may never be freed says the Telegraph

Khan pleaded guilty to planning an act of terrorism but his barrister, Michael Wolkind QC, told the judge at Leicester Crown Court: "This is not a plea of remorse, it is a pragmatic deal."
Sentencing him to life, with a minimum of 14 years in jail, the judge, Mr Justice Henriques said: "So rampant are your views, so excitable your temperament, so persuasive your tongue and so imbued with energy are you, it's quite impossible to predict when, if ever, it will be safe for you to be released into the public.

The Sun as does most of the papers has

The first photos of Sally's killer

Mark Dixie is pictured for the first time today after a judge lifted an order banning publication of his photo.Pub chef Dixie, 37, was branded “disgusting" yesterday - by his own defence lawyer.
Anthony Glass QC also told a jury that Dixie’s defence may be worthy of ridicule

Most of the papers meanwhile report that

Divorce battle goes public as McCartneys can't agree deal,The Times says

After six days behind closed doors at the High Court, a ruling will now be made by the judge on how much of Sir Paul’s reputed £825 million fortune Ms Mills should receive.
The failure to reach a deal, despite reports at the weekend that one was imminent, means that the pair are still poles apart – and it will fall to Mr Justice Bennett to deliver an order, probably in two to three weeks’ time.
Nicholas Mostyn, QC, who has been representing the former Beatle in his dispute with the former model, confirmed as he left court that the judge had reserved his ruling

No-show Paul ditches £55m peace deal at the 11th hour reports the Mail

Paul McCartney attempted to pull off a high-risk legal stunt yesterday by abandoning a record £55million divorce deal just hours before it was due to be signed in the High Court.
The turn-around came late on Sunday evening after Fiona Shackleton and Nicholas Mostyn QC - Sir Paul's legal team - advised him he could save millions by letting High Court judge Mr Justice Bennett decide on a payout for Heather Mills.

Spain exposes EU split as US leads recognition reports the Guardian.

Europe's big countries and the US moved yesterday to seal Kosovo's future irreversibly as an independent country by promptly announcing the diplomatic recognition of the fledgling state.
While Washington recognised Kosovo as "a sovereign and independent state" last night, European foreign ministers spent hours wrangling over a common position. They eventually agreed a statement turning Kosovo into a European protectorate and enabling individual EU countries to establish diplomatic relations with Pristina following Sunday's declaration of independence

Serbia recalls its US ambassador reports the Independent

As Serbia recalled its ambassador to Washington, the Prime Minister, Vojislav Kostunica, told MPs: "This decision by the US will not turn the false state [Kosovo] into a real one. The government has ordered the immediate withdrawal of the ambassador."


The Times reports that

Condoleezza Rice appeals for Kenya coalition

Dr Rice told reporters: “There needs to be a governance arrangement that will allow real power-sharing, that will allow a grand coalition.”
She spoke after meeting Kofi Annan, the former UN Secretary-General, who is leading mediation talks to end the violence - triggered by the widely contested election result - that has caused the deaths of more than 1,000 people.
Mr Kibaki's Government said on the eve of her visit that it would not bow to pressure to enter an agreement with Mr Odinga, and has emphasised that it is only willing to include some opposition members.

The Telegraph reports that

Teenage drinkers could be criminalised

Thousands of children face having a criminal record if they are caught holding a can of beer, under plans being considered by ministers.The proposals would mean that any under-18s found by police with alcohol would receive a criminal conviction, which would have to be declared to future employers.

According to the Guardian

Drink and drugs can damage men's sperm, study suggests

Men should not smoke, drink or take unnecessary drugs if they are planning to become fathers to avoid causing health problems for their children, a health expert has warned.
Scientists found that toxic chemicals can damage sperm, which then pass altered genes onto babies. In experiments on rats Matthew Anway of the University of Idaho found that some garden chemicals caused problems such as damaged and overgrown prostates, infertility and kidney problems, all of which were present up to four generations later.

The Indpendent reveals

the first draft of dossier that took Britain to war

Fresh evidence that the Iraq weapons dossier was "sexed up" emerged as the Government finally published the secret first draft of the document.
As expected, the earliest version of the document did not include the now notorious claim that Saddam Hussein could launch weapons of mass destruction within 45 minutes of an order to do so. reminding us

The first draft made a series of lurid claims about the extent and danger of the Iraqi president's weapons arsenal. But those were expressed in even stronger terms by September 2002, when the official dossier on which Tony Blair based the case for war was published.

Finally the Mail reports

Postman thrown out of cinema for buying his own - much cheaper - sweets elsewhere

Preparing for a visit to the movies, Adam Glennon sensibly decided to stock up with his own supply of snacks rather than pay exorbitant cinema prices.
But after buying a ticket to watch the sci-fi thriller Cloverfield, Mr Glennon was approached in the foyer by a security guard demanding to know what was in his plastic bag.
When he searched it and found sweets, drinks and cola inside, the guard ordered Mr Glennon to hand over the bag and its contents and

He refused and was then told he would not be allowed in to see the film with food bought elsewhere. So he had to leave.