The Tribune Co. yesterday said the publishers of its Newsday and Hoy newspapers in New York would be replaced as part of effort to limit the damage of revelations that both publications had inflated circulation figures for at least three years.

The announcement came after lawsuits were filed by Newsday advertisers alleging the paper, considered one of the largest and most successful in the nation, had engaged in circulation fraud. An ongoing audit continues to turn up new questions about the numbers, company officials said.

Raymond A. Jansen, publisher of Newsday since 1994, said he would leave the company in mid-August, months before his planned retirement. He will be replaced by Timothy P. Knight, who recently was named president and chief operating officer. Louis Sito, publisher of the Spanish-language Hoy, will be replaced by Digby Solomon Diez, that paper's general manager.

Neither Jansen nor Sito was accused of being directly involved in pumping up circulation figures. In a statement posted on the Newsday Web site, Knight made it clear they were part of a housecleaning effort intended to reassure advertisers and readers.

In a letter addressed "Dear Fellow Newsday Employee," Knight wrote, "You have my personal pledge that we are fully committed to determining why, how and by whom these unacceptable circulation practices occurred." The letter continued: "It will not be easy to rebuild trust -- trust on the part of everyone who works here at Newsday; trust among our advertisers, our readers and our community."

The scandal at the Chicago-based Tribune is the latest hit to an industry already suffering from questions about integrity. This spring, the editor of USA Today resigned after the newspaper reported that its star reporter had made up or plagiarized stories. The top two editors of the New York Times were forced out last year after a young reporter fabricated stories.

"It's a blow to the credibility of newspapers," said John Morton, president of Morton Research Inc. in Silver Spring and a veteran newspaper industry analyst. "I suspect the more they dig into it, the more likely it is they will find" other problems.

The Tribune investigation will likely continue through the summer. In the meantime, Tribune officials have created a $35 million fund to repay advertisers who paid higher rates based on inflated circulation, according to a 3,992-word examination by a team of Newsday reporters published in yesterday's editions.

Those reporters found that in the quest to bolster flagging circulation, employees delivered thousands of copies of newspapers to people who never paid or even asked for the papers. The story quoted a former circulation employee as saying, "The whole concept of the [circulation] report was to make things look good, not necessarily to show an accurate number."

Newsday circulation for the 12 months that ended in September last year was reported as 579,729, but company officials said in a statement yesterday that number would be cut by about 40,000, or about 7 percent. Sunday circulation for the same period was reported as 671, 819, a figure that will drop by some 60,000, or about 9 percent The number reported for Hoy's daily circulation would be cut from 92,604 to just under 78,000 -- a drop of about 16 percent.

Newsday Editor Howard Schneider said newsroom workers are angry about the deception and sorry to see Jansen going. "This is a sad day for most people in the newsroom," he said.

Tribune Co. set aside $35 million to compensate advertisers who were misled by faulty circulation numbers for its Newsday and Hoy newspapers.