Millions of pounds are to be invested in pubs formerly owned by Morrells of Oxford.

Brewing group Greene King's pub estate director David Elliott said the Suffolk-based firm, which bought 107 Morrells pubs in June, would announce an investment of several millions in the former Morrells estate by May next year.

He added that profit margins were lower in the Morrells pubs than elsewhere, but there were no plans to increase beer prices above the rate of inflation.

The announcement came as Greene King announced a nine per cent rise in pre-tax profits.

Turnover at the Bury St Edmunds company was up 17 per cent to £249m, producing profits of £35m for the 24 weeks to October 19.

Chairman David McCall said: "While leisure consumer expenditure seems to have tightened slightly, we are confident that the strength of our business and strategy will enable us to sustain our progress."

The group owns 1,700 pubs.

High street pubs account for just 140 sites from the managed pubs estate and very few from the leased estate.

Mr McCall said future consumer spending patterns were unpredictable, but analysts maintained that the provincial nature of Greene King's pubs was expected to protect it from any high street slowdown.