Michelle Stanistreet, NUJ general secretary, said: “News of these secret negotiations have understandably blindsided journalists across the Guardian and Observer.
“Of course, our members rightly fear the impact on jobs and livelihoods. However, their anger and dismay is also motivated by the adverse impact such a sale will have on the future of both titles, and on wider press freedom and plurality.”
Mr Harding this week held meetings with Observer staff and NUJ leaders in an effort to smooth over concerns about the deal.
Tortoise, which has said it will invest £25m in The Observer over the next five years, has pledged to keep on all 70 Observer employees and maintain their existing conditions, including pay and pension contributions.
It has also played down concerns about high levels of overlap between The Observer and The Guardian and the difficulties in untangling them.
The start-up is expected to build out stand-alone operations for The Observer in areas such as foreign, sport and business, which are currently served by Guardian journalists.
Mr Harding told staff that the deal would unlock more investment in the title, which has long been overlooked by its parent company, while strengthening its credentials as a progressive paper.
But the promises have so far failed to win over journalists, who fear insecurity under the ownership of a start-up that has racked up £16.3m in losses since its launch in 2018.
Staff also believe Guardian bosses are trying to force through the deal by threatening a tough future for the paper unless it is sold.
Ms Stanistreet accused the Scott Trust of “dismantling” protections afforded to The Observer, describing the plans as “short-sighted and flawed”.
Mr Harding has said that he expects the Sunday title, which was founded in 1791 and been loss-making for decades, to break even in 2027. He is aiming to reach 173,000 paying subscribers in 2029, up from its current circulation of 114,000.
The news executive, who is also a former editor of The Times, has secured backing from investors including the billionaire family behind the Nando’s chicken chain and the dynasty that owns fashion giant H&M. Gary Lubner, the South African Labour donor who previously led Autoglass, will also provide funding.
Around half of the planned investment is expected to fall in the first two years as Tortoise pumps money into the Sunday newspaper titles. But Tortoise plans to fund much of the £25m pledge through future profits rather than new cash investment.
The start-up is hoping to close the transaction in November once Guardian Media Group has settled its dispute with the NUJ, though this could be pushed back in the event of a strike.
Following a deal, it is expected that Observer staff would be gradually moved over to Tortoise’s offices just off Oxford Street during a transition period of around three months.
A Guardian spokesman said: “Guardian Media Group announced last month that it was entering into exclusive negotiations about the offer from Tortoise Media to buy the Observer.
“We were transparent about the offer so that we could openly engage with Observer staff and we will continue to do so.
“The offer proposes an investment in the future of the Observer, including building a digital presence for the Sunday newspaper and those discussions are ongoing.”