The pro-democracy Hong Kong newspaper Apple Daily looked set to close for good by Saturday following police raids and the arrest of executives - a move that critics say undermines the city's status as a free and open society as Beijing tightens its grip.

Mark Simon, an adviser to the jailed owner and staunch Beijing critic Jimmy Lai, told Reuters on Monday the newspaper would be forced to shut "in a matter of days" after authorities froze access to the firm's core operating capital, needed for staff wages and other expenses, on national security grounds.

In an internal memo to some staff seen by Reuters, Apple Daily said the board of its parent company, Next Media, would decide by week's end whether to keep going.