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Behind-the-scenes negotiations were under way Wednesday to save France's flagship left-wing daily Liberation, after one of its founders Serge July was asked to step down as chairman because of mounting losses.
Principal share-holder Edouard de Rothschild was holding talks with staff representatives over his terms for a new injection of capital to rescue the newspaper from bankruptcy.
Rothschild has demanded July's resignation -- as well as that of managing director Louis Dreyfus -- as a condition for more investment, and on Tuesday July said he is willing to go "if my departure can help the refinancing of the newspaper."
Press reports suggested that July's resignation would be formally accepted at a board meeting on Saturday.
A 63 year-old former Maoist, July helped set up Liberation in 1973 with philosopher Jean-Paul Sartre, and news of his impending departure sent morale plummeting among the 280 staff-members.
Wednesday's edition of the paper carried a front-page message of support for July from the paper's journalists.
"For 33 years Serge July ... has been the guarantor of our editorial independence. Throughout this time he has been a bulwark against every intrusion, every outside influence that endangered our integrity and values," it said.
Many Liberation journalists are concerned that Rothschild's influence spells the end of the newspaper's historic aim of offering a voice that was free from the pressures of advertising and financial capital.
A member of the European banking family, Rothschild invested 20 million euros (25 million dollars) in Liberation in January 2005, but he is said to be furious at the newspaper's continuing losses which hit 900,000 euros in April -- three times the figure budgeted for in a restructuring plan.
Aiming to save 4.3 million euros in 2006, the plan sparked a four-day strike in November after which the management offered redundancy packages to 56 out of 334 employees.
Since then the newspaper has revamped its Internet site and launched a week-end supplement, but circulation has failed to pick up.
The last official figures show that Liberation sold just under 137,000 copies in France in 2005, down from 163,000 in 2001 and 182,000 in 1990.
Several national French newspapers have recently fallen into financial difficulties as a result of historically low readership figures as well as growing competition from the Internet and free-sheets.
The once best-selling France-Soir was off the newsstands for two months up till last week after it came close to bankruptcy, while the pro-communist daily L'Humanite is struggling to survive after circulation fell to just 50,000.
Le Monde and its sister publications last week announced losses for 2005 of 28 million euros.
hs/sj
France-press-Liberation
AFP 141400 GMT 06 06
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