The future of one of China's best-selling investigative magazines is at stake in an increasingly public battle for control that pits its envelope-pushing editor against her financial backers.

Hu Shuli, known for her careful and influential documentation of backroom deals and the twists and turns of economic policy, is trying to wrest more budgetary and managerial control over the popular business magazine Caijing. She hopes to expand into online ventures and a news wire-like service.

But her backers are taking a more conservative approach, trying to keep the reporting focused on purely financial topics and avoid straying into politically sensitive areas.

Several employees on the business side resigned late last month, and rumours that editorial staff are poised to go have raised the stakes in the negotiations.

If negotiations fail, sources and Chinese media say several potential backers are waiting in the wings to finance a new publication headed by Hu.

The resignations have all been on the marketing side, but the editorial staff have stayed in place and we're still putting out the magazine, said a Caijing editor, requesting anonymity. What happens from here will depend heavily on what Hu Shuli decides to do.

Hu could not be reached for comment.

Caijing has a circulation of 100,000 but boasts annual advertising revenues of about 200 million yuan ($29.4 million), making it one of the country's most profitable publications.

The bi-weekly has a devoted following among China's economic decision-makers, and is respected for its accuracy, insight and ability to skirt the bounds of China's media censorship.

China has tightened controls over media in the last year, as it tried to steer through the global financial crisis.

Caijing is owned by the Stock Exchange Executive Council, or SEEC, a media group run by Wang Boming, the son of a former senior official who has provided political cover and financial backing for the magazine for years.

Zhang Lihui, head of public relations for Caijing, said on Tuesday that the publication's general manager, Daphne Wu, who headed business operations, had resigned for personal reasons.

Zhang denied there had been mass resignations, saying recent departures in the business department reflected normal change.

Hu is still with the company, Zhang said, denying a fallout. Hu Shuli's situation has not changed at all, Zhang said.

Stock trading in SEEC's Hong Kong listed arm, SEEC Media Group, has been volatile since rumours of the disagreement with Hu first surfaced in September. The stock had risen 16 percent in the last month.

Thomson Reuters has an investment in a separate venture owned by SEEC.

If Hu and her associates do try to form a new venture that breaks out of Caijing's successful niche, they would face a field crowded with news portals, many of them long-established listed brands, as well as competition from state-run media that are expanding the scope and speed of their financial coverage. (Additional reporting by Chris Buckley and Yu Le; Editing by Benjamin Kang Lim and John Chalmers)

China