Libération, the struggling newspaper that has been a key forum of the French left for 33 years, has been given six months to stave off insolvency.

The tabloid daily, whose founders included the philosopher Jean-Paul Sartre, has been granted a half-year respite from its creditors after successfully requesting a procédure de sauvegarde, similar to Chapter 11 bankruptcy protection in the US.

Libération has been one of the titles hardest hit by a broad decline in newspaper circulation in France. Between 2001 and 2005, its daily sales fell 17 per cent to less than 150,000. It made a loss of €6 million in the first half of 2006, according to a body representing employee-shareholders.

The paper's biggest investor is the financier Edouard de Rothschild, a member of the Rothschild banking dynasty and horse-racing aficionado. He owns nearly 39 per cent of Libération after injecting €20 million in a previous refinancing in 2005.

When Serge July, one of Libération's co-founders and its editorial figurehead, departed this summer, he claimed that he had been asked to go by Mr de Rothschild. More recently, Florence Aubenas, a reporter who became a household name in France after being held hostage in Iraq for 157 days, quit the paper in order to join Le Nouvel Observateur, a news magazine.

An article explaining the procédure de sauvegarde in yesterday's Libération stressed the paper was still able to pay its bills and that management would remain in control of the business, working alongside an official nominated by a Paris court.

"The day-to-day activity of the Libération team will not be affected," it said, adding that the coming weeks would be spent finalising a restructuring.

The debt-freeze procedure invoked by the newspaper became available to French companies at the start of this year. The government hoped that it would encourage businesses facing serious financial difficulty to take drastic action before it was too late to save them from insolvency.