The Sun and The Times are to cut the freelance rates paid for stories and pictures to levels condemned as "completely unacceptable" by the National Association of News and Picture Agencies.
The move follows a review of operations which could also see widespread cuts to staff journalists across News International – especially among production staff, according to sources at Wapping.
News of the cuts, which take effect on 9 February, comes days after Sun editor Rebekah Wade used the annual Cudlipp Lecture to insist that investment in journalism was the best way for the publishers to survive the recession.
One source at the National Union of Journalists said the union had heard that the outside consultants reviewing operations at News International had recommended that up to 10 per cent of journalists, around 200, could be cut.
But another source close to NI said this was wide of the mark - and that as well as efficiencies, NI was also making significant investment in staff at present.
Sun deputy managing editor Richard Barun has informed news agencies of the cuts to rates in a letter in which he insists that The Sun remains the "the biggest overall payer in the business".
He said: "I'm please to say that The Sun will continue to pay more than any of our rivals for great exclusive words and pictures."
The new rates are: £20 for a one or two paragraph story; £35 for three to five paragraphs; £50 for six to eight paragraphs and £70 for nine paragraphs.
The rates for small, medium and large page-lead stories are £100, £110 and £135 respectively.
The day rate for commissioned work is £110 and the rate for a page lead in the showbiz section Bizarre is £600.
Napa treasurer Chris Johnson, from Mercury Press agency, said: "They are shaving £5 and £10 off rates that were set in 1993 – they are the lowest rates on Fleet Street."
The minimum rate for a picture, of up to two square inches, has been set at £70 to £75, rising to £100 for six square inches, £130 for up to 30 square inches and £168 for 30 to 56 square inches.
Johnson said: "People won't be able to supply pictures at these rates – many agencies already set a minimum fee which is higher than this."
The Times has cut its minimum rate for photos from £90 to £54 and cut the rate for photos used at 11 to 25 square inches from £130 to £90.
This contrasts with minimum rates for live news photos of £165 paid by Express Newspapers and the Daily Mirror.
The News of the World has issued rate card fees of £20 for a one-paragaph story, £35 for two to three paragraphs and £50 for four to five paragraphs.
These are also believed to be lower than those previously charged by agencies. The rate paid for a page lead is £450 to £700.
Napa has called emergency meeting for next Wednesday to discuss the rate cuts.
Johnson told Press Gazette: "Reducing rates would be a real own goal for News International since it would hand a huge advantage to its rivals, whose rates are somewhat more realistic.
"I've been inundated with calls and emails from irate Napa members.
"We will be seeking talks with NI in the hope that we can prevent this drama turning into a crisis."
A News International spokesman was not available for comment at time of writing.