It was past 9:30 p.m. when the reporters finished writing. The presses were scheduled to begin printing the next day's issue of the Southern Metropolis Daily in a few hours, and space for a large headline had been reserved on the front page.

But when the night editor read their story -- an investigative report about a young college graduate who had been detained by local police and beaten to death in custody -- he hesitated. Then he picked up a phone and called Cheng Yizhong, the paper's star editor.

Cheng had built the Daily into this southern city's most popular and profitable tabloid, practicing a feisty brand of journalism editors across China were trying to imitate. But a few days earlier, in a clampdown ordered by a new Communist Party leader in the province, he had been stripped of his title as editor in chief. He was now running the paper as deputy editor.

Others in the newsroom had briefed him twice about the article, but given the circumstances, the night editor wanted to check with him one last time, colleagues recalled. The story was certain to anger government officials, and there was still time to pull it. Instead, Cheng gave the order to publish.

The article, published April 25, 2003, spread quickly on the Internet, and newspapers across the country reprinted it. Reporters dug deeper, exposing abuses in a nationwide network of detention camps that purchased and sold inmates like slaves. Put on the defensive by rising public outrage, Beijing ordered the camps closed and abolished a decades-old law that gave police sweeping powers to imprison people at will.

It was a landmark victory for the Chinese press; never before had reporters influenced national policy in such a dramatic fashion. But in March, Cheng was arrested and two of his colleagues were sentenced to long prison terms in a corruption probe that party sources said was an act of retaliation by local officials.

What happened to Cheng highlights a momentous and complex struggle between the country's increasingly independent-minded and profit-driven state media and entrenched interests inside the ruling Communist Party. The outcome could determine the future not only of journalism in China but also of the largest authoritarian political system in the world.

More than a quarter century after China launched economic reforms while continuing to restrict political freedom, the government still owns and controls all of the country's newspapers and television stations. But journalists have fought off party censors in one sensitive subject area after another, and they are waging a daily battle for even greater freedoms.

This push is driven in part by economics. In a sweeping industry overhaul, the government is withdrawing subsidies from state media outlets, holding them responsible for their own profits and losses and opening the door to private investment. The market has led newspapers to set aside propaganda and deliver stories that readers are actually interested in. Many have turned to gossip or entertainment, but there is also a financial incentive to produce a scarce commodity: journalism that challenges the government.

The party is torn about this creeping expansion of media freedoms. It believes a more assertive press can help it fight corruption and improve governance, but is afraid of losing control over an institution critical to its monopoly on power. Regular skirmishing between journalists and officials who want to suppress stories that make them look bad has threatened the party's unity. And as journalists begin to view themselves as watchdogs for the public rather than lap dogs for the party, the government's old methods of control are weakening.

New Journalism

On Sept. 1, 1997, readers who picked up the Southern Metropolis Daily found a different kind of Communist Party newspaper. Instead of the latest pronouncements on Marxism, a quarter of the paper's 16 pages were devoted to the death of Princess Diana. The tabloid stunned its rivals; almost every newspaper in China had covered Diana's death with only a few hundred words.

The tabloid was an experiment launched by a staid party newspaper, the Southern Daily, to grab more advertising in this booming city of 7 million.

Cheng was not yet 30, the youngest member of a three-man committee appointed to set up the paper. He was a party member and a rising star, the son of peasants who landed a job with the Southern Daily after studying literature at Guangzhou's most prestigious university. He had already distinguished himself as a creative editor, so when he volunteered to help start the tabloid, he was named deputy editor.

"It meant more pressure and more work, but he asked to do it," recalled his wife, Chen Junying, a fellow editor at the Southern Daily. "He wanted work that was more honest, and more competitive, and of greater significance."

A quiet man with a youthful face, Cheng threw himself into the project, studying newspapers around the world, writing a 10,000-word plan of action and personally designing the tabloid's masthead using 5th century calligraphy from the Northern Wei dynasty. His wife had just had a baby, but it was the newspaper he doted on.

The newspaper employed fewer than a hundred reporters then, and Cheng edited and laid out several pages each night. He also pioneered a new genre of journalism in China, writing reviews of the foreign films that were becoming widely available on video CDs.

The newspaper bled money at first, and Cheng's bosses had their doubts. In one meeting, Cheng argued it would soon become Guangzhou's top newspaper. His audience burst out laughing, colleagues recalled.

But Cheng kept pushing. The paper became the first in China to offer daily consumer sections -- automobiles on Monday and real estate on Thursday, for example. It broke new ground with blowout coverage of World Cup finals in 1998, publishing eight pages a day for 43 consecutive days to the delight of this soccer-crazed nation.

The newspaper also began to distinguish itself with more critical reporting on social problems like crime and corruption, causing a sensation, for example, with a report on restaurants that used cooking oil extracted from kitchen waste.

While other newspapers avoided angering local officials by muckraking only in other provinces, the Daily focused on hard-hitting reporting in its own city and region.

The strategy worked. Circulation climbed from 80,000 at the end of 1997 to 380,000 a year later. After a talented, young advertising manager, Yu Huafeng, joined the staff, revenues jumped, too. In its third year, circulation reached 610,000 and the paper eked out its first profit.

By 2000, the Southern Metropolis Daily had become both the largest and most expensive daily newspaper in China, charging about 12 cents for 72 pages. The next year, the party promoted Cheng to editor in chief. Yu became a top deputy and the paper's general manager. The average age of the Daily's 2,200 employees was 27 in 2002. The average age of the members of its senior management was 33.

The newspaper was pugnacious. Once, local officials in the neighboring city of Shenzhen tried to banish it from its newsstands. The next day, a headline on the paper's front page declared, "Someone in Shenzhen Shamelessly Shut Out This Newspaper." A month and a half later, the ban was lifted.

Colleagues described Cheng as an eloquent speaker. At weekly staff meetings, he urged his reporters to remember they were working for the public. In one memo, a reporter recalled, he criticized an article describing the problems caused by the city's prostitutes. He said the paper should sympathize with the weak and concentrate on "supervising" the strong.

"In the newspaper business, we have already learned how to be out of power," Cheng said in an interview distributed by the paper's marketing department in 2002. "Now, we must learn how to act like a newspaper that is in power."

Cheng said the party had given the press a mandate to monitor local officials. But he said he also picked his targets carefully. "In China, supervision by the media can only proceed within the existing system," he said. "Freedom means knowing how big your cage is."

A Brief Victory

A few days after Chen Feng was hired as a reporter at the Southern Metropolis Daily in late March last year, he received a hot tip. A college student told him she had heard that a 27-year-old graphic designer named Sun Zhigang had died in police custody after being detained for failing to carry his temporary residence permit.

Chen was worried the story might be too sensitive. But without hesitating, his editor gave him permission to investigate, he recalled.

Chen, 31, a portly fellow with close-cropped hair, teamed up with a colleague, Wang Lei, 28, who was taller and thinner and sported a goatee and long hair. They found Sun's family, and convinced them to ask a medical examiner for an autopsy. A few weeks later, they learned the results: Sun had been beaten to death.

The two reporters briefed one of the paper's top editors. He immediately expressed interest, they recalled, and issued specific instructions: First, make sure to get every detail right. Second, get the story done fast before the authorities could order the subject off-limits. China has never employed an extensive system of censors. Instead, the party's propaganda authorities appoint the editors of every newspaper, issue directives banning coverage of specific subjects and rely on journalists to censor themselves. Those who don't comply are fired or demoted, and in some cases, their publications are shut down. On rare occasions, a journalist might be arrested.

Chen and Wang moved quickly, interviewing Sun's friends, employers and relatives as well as medical and legal experts. Then they tried to interview police and were told to go away at two precinct houses and city headquarters. They planned to write the story the next day.

But their editor was worried, they recalled. He said they should have waited until the last day to contact police, because the police might call the propaganda authorities and squash the story. Then he ordered them to write it that night.

The article was splashed across two pages. On the tabloid's front, a large headline read, "The Death of Detainee Sun Zhigang." A smaller one said, "University Graduate, 27, Suddenly Dies Three Days After Detention on Guangzhou Street, Autopsy Shows Violent Beating Before Death."

The public's response was overwhelming. Hundreds of people called and sent faxes to the newspaper to express outrage or tell their own stories of police abuse, and tens of thousands posted messages on the Internet.

Chen and Wang wrote a follow-up story the next day, but local propaganda officials blocked the piece, Chen recalled. The reporters then sent the story to a friend at a Beijing-based newspaper, where it was published a few days later under a pseudonym.

Soon afterward, they recalled, Cheng Yizhong, the star editor, summoned them to his office for a meeting. He urged them to keep digging, even if not all of the stories they wrote could be published. Then he said he hoped their reporting would lead Beijing to abolish the law used to detain Sun.

Chen recalled thinking his editor was crazy. "I thought he might be feverish," he said.

But the pressure for change continued to build. Sun had been detained under a law the party had used to restrict migration for decades, a sort of internal passport system that allowed police to send people without residence permits into any of about 700 custody-and-repatriation centers across the country. Legal scholars began calling for a review of the law, arguing that it violated basic human rights. Journalists began showing how police often detained people at will, forced them to work in the camps and then held them until relatives paid hefty fees.

Cheng kept the Daily at the forefront of the campaign, publishing a series of special reports and editorials. When Beijing announced the decision to abolish the detention system, he put that on the front page, too.

Local Retaliation

Afterward, some senior officials praised the Southern Metropolis Daily's reporting as a model of how the news media could play a constructive role in the party, party sources said.

But the end of the detention system deprived police agencies, a powerful branch of the state, of a lucrative source of income. More importantly, the story had embarrassed local leaders in Guangzhou and perhaps ruined their careers.

Local officials angry at the media usually go to propaganda authorities to demand that journalists be punished. But Beijing had all but endorsed the Daily's reporting by abolishing the detention camp system, which made it difficult for officials in Guangzhou to take action.

Still, they tried to pressure the newspaper. On the day the story of Sun's death was published, Guangzhou's party secretary angrily threatened to take the Daily to court, journalists said. Later, Cheng received a call from an old classmate who delivered a message from another senior city official warning him to back off, colleagues said.

Soon after Beijing abolished the detention law, Guangzhou party leaders ordered an investigation into the newspaper's finances and investigators began pressuring advertisers for evidence of corruption, party officials and advertisers said.

"They couldn't use the propaganda system to punish the newspaper because it hadn't made any serious mistakes," said one provincial party official, who spoke on condition of anonymity. "So they turned to the justice system."

Within a month, prosecutors detained Yu Huafeng, the paper's general manager, and questioned him about a $350 necklace an advertiser had given his wife as a gift after she had a child. Yu replied that he had given the advertiser a $1,000 video camera when his wife had a child, and he showed them the receipt to prove it, according to his wife, Xiang Li.

The authorities refused to release Yu. But Cheng mobilized his own supporters in the party, and the provincial propaganda chief intervened and forced the prosecutors to let Yu go, two party officials said.

The showdown suggested the Daily had more support in the party than its enemies, and Cheng and Yu relaxed, colleagues said. They made plans to launch tabloids like the Daily in other cities, and opened talks with another newspaper to join forces and start one in Beijing.

In mid-October, in what appeared to be an important endorsement, the party's central propaganda department in Beijing approved the newspaper. Cheng was named the new paper's editor in chief.

Clampdown Intensifies

But Cheng had underestimated his enemies in Guangzhou. A year earlier, the party's top official in the Guangdong province had departed. His replacement was Zhang Dejiang, a party leader who had complained that reporters in Guangdong were too difficult to control, according to people who heard his remarks.

It was Zhang who had ordered the March clampdown in which Cheng was demoted to deputy editor, party officials said. He had also fired the editor of another paper and completely shut down a third.

In December 2003, city leaders won permission from Zhang or his deputies to continue the corruption probe of the Southern Metropolis Daily, according to two party officials. Prosecutors detained Yu again, and this time he was not released.

But Cheng refused to tone down the paper's coverage. Ten days after Yu's arrest, the Daily reported a world exclusive: Health authorities in the city had identified a suspected case of SARS, the first in China in several months.

The next day, the city confirmed the report and said it had been planning to make the announcement all along. Zhang was embarrassed and furious, a party official said, but because of the government's failed cover-up of the first SARS outbreak, it would have been difficult for him to punish the newspaper for the disclosure.

Instead, the corruption probe intensified. In early January 2004, prosecutors interrogated about 20 editors and business managers at the newspaper, including Cheng. But even as the pressure grew, the Daily won some of the nation's top journalism honors and announced that circulation had topped 1.4 million and 2003 profits would approach $20 million, making it one of the country's most successful papers.

At the end of January, Zhang turned the screws tighter. At a large gathering of party discipline officials, party sources said, he asked sarcastically whether the party still owned the Daily. Then he declared that the media couldn't just monitor others; someone had to monitor them, too.

One of his deputies accused the Daily's executives of stealing state funds, essentially convicting Yu before trial, the officials said.

A few days later, Cheng delivered a defiant speech to his staff. Dressed in a black jacket and a cotton shirt and sitting at the head of a conference table in a room with more than 100 senior staff members, Cheng said a clash between the newspaper and "a few powerful individuals" had been building since the Sun Zhigang article was published, according to witnesses and a copy of the speech.

"Some people are sharpening their weapons. . . . This storm was bound to come sooner or later," he said. "We are already prepared. For the progress of the nation, the development of society and the happiness of the people, it is worth suffering some inconvenience and misery!"

"Whatever happens," he vowed, "we must not give up our ideals and beliefs."

A few weeks later, a local court convicted Yu of corruption for transferring bonus funds from the paper's advertising department to the newsroom, a common practice at many newspapers. The court also convicted him of bribery for paying a bonus to a supervisor at the Southern Daily, Li Minying.

In March, Yu was sentenced to 12 years in prison, and Li received an 11-year sentence for accepting a bribe. The next day, police arrested Cheng.

The sentences and the arrest stunned the newspaper's supporters because there seemed no evidence of any crime and because the amount of money involved was relatively small. Journalists across the country signed petitions in protest, and many who had campaigned against the detention law began lobbying on behalf of the Southern Metropolis Daily.

As public outcry grew, three retired party chiefs in Guangdong wrote letters to Zhang urging him to review the case, arguing it had jeopardized the province's reputation as a pioneer of economic reform, party officials said. In an unusually public sign of division within the leadership, a Beijing magazine reported on two of the letters.

In June, the courts reduced Yu's sentence to eight years and Li's to six years on appeal. Cheng remains in prison but has not yet been charged with a crime, a sign that party leaders have not decided what to do.

The Southern Metropolis Daily is still publishing, but editors are more careful about criticizing local authorities. Almost all of the paper's key ad salesmen have resigned, and dozens of reporters have quit. In the first quarter of the year, officials said, the paper lost $1.5 million.

But the new tabloid started by Cheng in Beijing has adopted the aggressive style of the old Daily and appears to be prospering. "This is the way it works," said a senior editor in Guangzhou who spoke on condition of anonymity. "For every two steps forward, there is a step backward. But we're still going to keep pushing."

Cheng Yizhong, editor of the Southern Metropolitan Daily, was jailed in March after his newspaper angered local authorities.Yu Huafeng, shown here with his son, was sentenced to eight years in prison for corruption and bribery.Cheng Yizhong, left, and Yu Huafeng, the Daily's general manager, published articles critical of local officials.