HEAVY discounting by booksellers including Waterstone's and Amazon.com was yesterday blamed for flat Christmas trading at smaller rival Ottakar's.

Ottakar's said there was no change in sales in the four weeks to January 7 as it struggled to compete with promotions on the high street and the Internet.

But the festive season signalled an improvement for the company. Sales were down 4.9 per cent over a 23-week period and down 2.9 per cent in the past 49 weeks.

Ottakar's said: "The book market enjoyed good growth in Christmas 2005. Ottakar's however, despite some uplift in the pre-Christmas week, felt the effects of the heavy discounting strategies adopted by its major competitors.

"Ottakar's expects conditions to remain challenging for the rest of the year and is well advanced in taking steps to reduce its cost base, maximise its margins and develop new sales opportunities."

Waterstone's book chain owners HMV has made a £96.4m bid for Ottakar's, which has a branch in Darlington's Cornmill centre, opposite a new branch of Waterstone's, on High Row.