Libération, the French newspaper that emerged from the legendary 1968 student protests, is on the brink of extinction. In June, after more than a year of mounting losses, chief shareholder Edouard de Rothschild, son of an old European banking family, forced out editor in chief Serge July, one of the paper’s co-founders, with Sartre. Since then, a publisher selected by Rothschild and an editor chosen by the news staff have shared power in a temporary arrangement. In October the paper went into a six-month “procedure of safeguard”–France’s version of Chapter 11.

Libération‘s troubles are the result of changes both in the media world and at the paper. Once the voice of the antiestablishment, Libération has in recent years drifted closer to the political center. Its core readers are an aging segment of the French left, most of whom regard Libé, as it is affectionately called, as a symbol of their identity rather than an essential morning read.

Libé‘s financial woes are not unique. The crisis affecting newspapers worldwide is particularly acute in France, where readers have little appetite for daily papers compared with their counterparts in much of Western Europe and the United States. It’s not that they are uninterested in political and social reporting and analysis; France ranks number one in the world in terms of the percentage of people who read newsmagazines. But it drops to 31 percent in the percentage of daily newspaper readers.

This situation is due in part to the nature of France’s major general-interest papers, which are edited in Paris and considered national, a perspective that the non-Parisian French often resent. The combined readership of the three major nationals, Libération, Le Figaro and Le Monde, is some 786,000. (By contrast, one of New York City’s three daily newspapers has a circulation just under 700,000; the other two are well above.) For a French newspaper to succeed, it has to offer something particular: The nationals have always offered a guaranteed point of view. Le Figaro is the paper read by the right, Le Monde the paper read by the left. Libération, with about half the circulation of the other two, has traditionally served the far left.

Libé began in 1973, with Sartre and “Citizen July” at the helm. As former members of a radical left-wing Maoist group that decided print was a better way than protests to fulfill their aims, July and the team stayed true to their roots and made it the people’s paper. Today, Libé is a tabloid whose cover usually features a provocative photo illustrating the main story, often the human side of a current issue, or an investigative story, although perhaps not what other papers consider the day’s lead news. Its photos are striking and numerous, and the writing is accessible, with few of the labyrinthine sentences that characterize Le Monde.

Its attraction to France’s large intellectual class has been its politics. Yet as July aged and moved toward the center, so did Libération. When in May of last year Libé encouraged its readers to vote for acceptance of the European Constitution even as polls showed that most people opposed it, readers saw this as a sign that Libé had lost its way. The question then became whether it differed enough from Le Monde to be worth spending roughly the equivalent of another $1.50 a day on it.

Until now, though, Libé has also offered something neither of the other main papers could: guaranteed editorial independence. Whatever July’s shortcomings, he fiercely guarded the paper’s journalistic freedom–especially precious at a time when Le Monde and Le Figaro seem compromised. Both papers acquired new major partners in the past three years and landed in bed with arms dealers. Serge Dassault heads the defense conglomerate Groupe Dassault, which owns Socpresse, the publisher of Le Figaro. He is also a member of the same center-right party as France’s president. Dassault fired Le Figaro‘s editor and its managing director shortly after he took over, and since then Le Figaro‘s journalists have complained that stories perceived as hostile to free-market principles or to Groupe Dassault are killed. Le Monde‘s major outside partner, the media company Lagardère, gets the bulk of its revenues from its interest in the scandal-plagued firm European Aeronautic, Defence and Space Company. Arnaud Lagardère recently removed the editor of one of his other publications for publishing photos offensive to his friend Nicolas Sarkozy, France’s interior minister and the center-right’s likely presidential candidate next year.

So when some three months after July’s departure, four veteran Libé journalists publicly resigned under a union clause that allows journalists who disagree with a new editorial direction to demand a buyout, much of the remaining staff angrily and publicly refuted the implication that July’s departure had compromised Libé‘s editorial independence. The departing journalists’ stance was seen by some as betrayal–a desire to abandon Libération and its uncertain future with a gilded parachute. As of yet, no one has made a strong argument that Rothschild has meddled in the editorial tone of the paper. In fact, he has been adamant that he wants Libération to maintain its traditional far-left editorial line.

Rothschild agreed in September to finance the paper until the end of the year, but his relationship with Libé‘s staff grows more acrimonious by the day. In late October he rejected the strategic editorial plan prepared by the staff’s representatives and countered with one that proposed further staff reductions and changes to the paper’s bylaws–notably that the staff relinquish its veto power over major management decisions. An accord seems unlikely, and the paper’s union has been casting around for alternative financing. Recently it made a desperate appeal to readers to join a “society of readers” whose membership dues will help sustain the paper. But the society is unlikely to counter Libération‘s losses, which passed $6 million in June.

For now Rothschild and his aggressive cost-cutting seem to be the only alternative. No one else appears to want to invest in a money-hemorrhaging paper with an identity crisis. And Libé‘s elite readership seems likely to continue its conflicted relationship with the paper. As one such French journalist told me: “Libération must not die, but a Libération owned by Rothschild is not Libération.”