Ladbrokes, the leading UK bookmaker, has ditched plans to break into the UK casino market in a blow for government plans to issue 16 new casino licences to local authorities.

James Purnell, culture secretary, is expected to announce in the next few weeks the formal burial of the proposed super-casino in Manchester. But he will give the go-ahead for the eight large and eight small casinos that remain from the wreckage of the government's much-derided casino expansion policy.