Are you reading this, Piers?

Deep in the recesses of the Garrick Club last week, a group of former and serving newspaper executives got together to discuss changing times. Would the Daily Mirror, they asked its editor Richard Wallace, ever consider supporting David Cameron? "I would rather saw a leg off," he replied.

Wallace's return to the Daily Mirror's traditional pro-Labour political stance, designed to appeal to its long-time core audience, is just one way in which he is steadying the paper after a long period of drift since the editorship of the flamboyant Piers Morgan.

Last week this ongoing journalistic revival paid off triumphantly when the paper was honoured in four categories of the British Press Awards - far ahead of its rival, The Sun. Journalists Stephen Moyes, Fiona Cummins and the much-admired political editor, Kevin Maguire, were celebrated for scoops, including John Prescott's affair with Tracey Temple, Ruth Kelly's decision to educate her child privately, and the McCartney marriage break-up. Insiders say the judges were close to giving the Mirror the "Paper of the Year" award ahead of The Observer, which, strangely, did not even win one category yet still scooped the top prize. The Mirror already holds the title of "Newspaper of the Year" in the What the Papers Say awards.

On Thursday the Mirror found itself in hot water with Kate Middleton, Prince William's girlfriend, who made the paper the subject of her first PCC complaint when she alleged harassment from a photographer. But this may be tempered by a ruling in favour of the newspaper when the PCC found that its Ruth Kelly scoop was in the public interest.

Yet as journalists basked in the congratulations of their peers, no such plaudits were on offer last week for Mirror Group's management. Instead, executives of the parent company, Trinity Mirror, are the target of anger and discontent among staff for their performance - and bonuses - against a background of circulation decline and budget cuts.

While the Mirror's circulation is down 8.2 per cent over the past year to an average of 1.5 million copies a day, compared to The Sun's three million, Trinity Mirror last week announced that the top brass were to receive huge bonuses. Sly Bailey, chief executive, received a £755,000 bonus to reward her for hitting financial targets and for achieving personal goals such as carrying out a strategic review of the business. This is despite the company reporting a pre-tax loss last year of £73m and its share price falling by over a fifth. In total, her pay last year rose almost 50 per cent to £1.47m.

The bonuses sparked outrage among staff, who claim that executives, in particular Ms Bailey, are being rewarded for failure and that Trinity Mirror management has little understanding of journalism and hasn't invested resources in its national newspapers. As a sign of this lack of understanding, they point to a gulf between executives and staff. When asked how management had thanked him for the British Press Awards triumph, Wallace confided to friends that he had received "an acknowledgement of the fact by email".

"The Mirror group has a poor management and a better-than- average editor," says Kelvin MacKenzie, former editor of The Sun.

"It's a cultural problem with Trinity Mirror management," says an insider. "Triumphing over The Sun and winning four awards was a great credit to the journalists but Sly Bailey just doesn't see it. She is a creature of the City who came up through advertising sales and probably sees a failure to thank her staff properly as a mark of efficient, hands-off management."

A former Mirror editor, Roy Greenslade, also criticises Trinity Mirror: "I don't have any qualms about management taking money when it is a reward for success, but when it is rewarding such abysmal failure, it stinks."

Amid this discontent, Wallace faces a greater problem : the continuing decline of mass-market newspapers and the pressing need to innovate. Clues as to how he will tackle this were revealed in an interview - the first he has given since becoming editor in 2004 - in which he suggested that papers needed to become more like magazines, targeting the older, working woman.

"We need to get used to the idea that today's newspapers aren't necessarily about news," he told Campaign magazine. Readers were "surrounded by the white noise of news", and already knew about most big events when they bought a paper. Therefore, the Mirror had to provide two key elements: "either an exclusive take, or the best analysis on a major event. It's no secret that I have taken the Mirror down a more magazine-style road, and skew a degree of content to the 35-plus working woman. Yes, the resignation of a Cabinet minister will be covered by the Mirror, but probably not on page one and probably not quite as exhaustively as in days gone by."

Wherever its political coverage is carried, however, there is quiet confidence at the Mirror that with the expected advent of Gordon Brown as the new Prime Minister, the paper is perfectly poised to catch the political zeitgeist. Its columnist Paul Routledge is a long-time Brown supporter and Kevin Maguire is well-favoured by Brownites.

Some claim the editorship of Piers Morgan unsettled core readers with an unpredictable political line. "Richard understands the need for balance," says an insider. "The Mirror is still full of celebrities but there is more sober and knowledgeable journalism there, too. He has moved the paper away from the crazy, zig-zag political agenda that existed under Piers and caused the Mirror problems. It's all very well to be against the war but not to assault Blair and Labour so relentlessly."

Meanwhile, after a turbulent year in which Trinity Mirror undertook a strategic review of its newspaper assets, the group is looking around for ways of coping in the rapidly changing media environment. Its website now carries two-minute news videos, a medium which, with the rise of YouTube, has captured the imagination of traditional newspaper groups and is seen as far more attractive than the podcasting phenomenon. Roo, an Australian web-video technology company, is providing video to the Daily Mirror and Sunday Mirror websites. Trinity Mirror is also looking to raise money from its sporting division by selling The Racing Post, which is expected to raise more than £200m.

"The whole media market is so volatile and the rate of change is so rapid that they're trying to buy their way into the future," says an observer. "In reality, the mass-market newspaper is on the way out and papers need to find a niche to survive. It is a tough road but Wallace knows it as well as everyone else. He knows he's just managing decline."

MEDIA DIARY

Alton towers?

Staff at The Observer were understandably ecstatic at the paper being named Newspaper of the Year last week, but they may have more than one reason for toasting their success. The decision has strengthened the hand of editor Roger Alton, whose relationship with Alan Rusbridger, editor of the Obs's stablemate, The Guardian, has never been the easiest. Rusbridger is thought keen to see his talented but restless protégé Ian Katz rehoused, and after nine years in the job, some thought Alton might have welcomed a move to a less demanding, senatorial sinecure in the Scott Trust, which owns the newspapers' parent company, Guardian Media Group. Alton will now surely be in no rush to vacate the chair running the Newspaper of the Year.

Difficult as ABC

Three big players - The Times, The Sun and The Guardian - have agreed to release regular monthly figures through the Audit Bureau of Circulation (ABC). But will the Telegraph submit to the electronic auditor ABCe for its online traffic? Its recent ad campaign, claiming to be the "most visited" quality newspaper website, raised a few eyebrows. The Telegraph took its claims from ratings compiled by Hitwise, which relies on surveys, but ABCes show it lagging The Guardian and The Times. The Telegraph is now "considering" a move to ABCes. Nothing like a level playing field.

Gordon shuns old media

Gordon Brown's surprise visit to Afghanistan sees him accompanied by correspondents from the BBC, ITN and Sky, but not one print journalist has been invited. "There was limited space," says an official. "You can't take a press pack on that sort of trip." Old media instead have to make do with a PA reporter and a pooled photographer. Surely the prime ministerial hopeful isn't bruised by the reception he's getting from the printed media?

Disappearing comic

Choppy airwaves at Christian O'Connell's Breakfast Show on Virgin Radio. Listeners are in uproar about the "disappearance" of DJ O'Connell's comedy sidekick Chris Smith, who was removed from the roster while on paternity leave. The website has been flooded with complaints from listeners, who think it was Smith, not O'Connell, who made the show.

The Sunday hard times

Congratulations to Christina Lamb of The Sunday Times for being named Foreign Reporter of the Year in last week's Press Awards, thanks to being in the right place at the right time when British troops were battling the Taliban in Afghanistan last summer. It won't be so easy in future, though: her paper has slashed the foreign travel budget,and Ms Lamb will have to wrestle other stars like Marie Colvin, left, and Jon Swain for the £350 a week now allocated for air fares.

Guarding the Guardian

With The Guardian looking like an online news provider, Carolyn McCall, chief executive of the Guardian Media Group, fielded emails from staff. The Guardian is underpinned by a pledge from Scott Trust "to secure the financial and editorial independence of The Guardian in perpetuity". One hack asked: "Does this pledge apply to the newspaper in its printed format, or just a commitment to the Guardian providing an independent news service in perpetuity?" McCall replied: "Liz Forgan, chair of the Scott Trust, has made it clear this is about The Guardian and its journalism in perpetuity, regardless of format. She is... rewriting the Scott Trust prospectus... to reflect the Trust's commitment in a changed world." Which doesn't answer the question.

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