Reporter Ahmad Taufik caught a break as he looked for a follow-up story after a fire devoured a centuries-old garment market in the heart of town last year. A city official had told him anonymously that plans to renovate the market were submitted by a powerful businessman three months before the fire.

The official was "very excited . . . to show me the proposal," recalled Taufik, a veteran reporter who covered national affairs for Tempo, the nation's most prominent newsmagazine. " 'But please,' the official said, 'Don't say you got it from me!' "

Taufik's article, published in March 2003, said that Tomy Winata, a banking and real estate tycoon, could stand to gain from the suspicious fire at the Tanah Abang market on Feb. 19, 2003. The government and Winata, who denied the magazine's charges, contended that the story was bad journalism and charged Tempo with criminal defamation.

Taufik and Tempo's chief editor, Bambang Harymurti, now face possible prison sentences. They and their defenders described the case as an attack on press freedom and democracy in Indonesia.

Appearing one recent morning before a three-judge panel in a stuffy courtroom, Harymurti evoked the name of Sukarno, the country's founder and beloved first president. He titled his defense plea, "A Journalist Accused," an allusion to the famous defense by Sukarno, "Indonesia Accuses!" when he was tried by the Dutch colonial government for sedition in 1930.

"Should a journalist who practices his profession as mandated by law, and who publishes his works according to journalistic norms enshrined in law, be seen as a criminal?" the editor asked.

He urged the judges to reject the state's case. Or, he said, "Your honors will be noted in the history of this nation as the earliest executioners of press freedom in this country."

The case has been taken up by press freedom advocates. The government prosecution of Tempo is "a draconian step, to have the criminal law used against journalists for doing their job," said Jim Nolan, an Australian lawyer representing the International Federation of Journalists as an observer at the trial. "We thought this was all behind us."

Winata, 46, who rose from a car washer and office boy to become one of the nation's richest men, said in an interview that the article was wrong and hurt his reputation. He said it riled the emotions of the market vendors who, he alleged, threatened to harm him. All he wants is an apology, he said, not jail time for the journalists.

But Tempo said it will not apologize, and stands by its story. Harymurti, 47, said, "I gave my agreement to have this article printed because I judged it to satisfy all necessary requirements."

The article included denials by Winata, who said, "I wasn't even involved, but now I'm getting the blame," and by the textile market's chief executive officer. Winata denied having a conversation with a Tempo reporter about Tanah Abang.

Taufik, 39, rushed to the scene when the fire broke out. Thousands of kiosks and the vendors' livelihoods were destroyed in the market, founded by a Dutch merchant in 1735.

One distraught merchant told Taufik that shortly before the blaze, he and others had been asked to sign a letter approving market renovations, and many vendors had objected. Now, these vendors strongly suspected arson, Taufik said.

But no official investigation was conducted, and the cause of the fire has not been determined.

Meanwhile, Tempo's sister publication, the Koran Tempo daily newspaper, published a report that the city had a plan to turn the complex into a modern commercial center with apartments, hotels and shops, and stalls for sidewalk vendors.

Taufik's first story included that information, as well as the merchants' speculation that the fire had been set. His follow-up was based on a document that the anonymous city official said was obtained at a meeting where the proposal was discussed.

The official, who refused to be identified for fear of reprisal, did not allow Taufik to photocopy the plan. So Taufik said he hastily jotted down a page and a half of notes on a small pad. In the magazine version, he included such details as the project's value of "53 billion rupiah," about $6 million, and said the kiosks would be "sold for RP 175 million a square meter," or $20,000 a square meter, and be transferred to the city after 20 years.

In his notes, he also wrote the name Tomy Winata in parentheses, saying he saw it on the document. The document was not signed by Winata, but by another man. Taufik said he did not know the relation of that man to Winata's company.

Harymurti ran the story under the headline "Was Tomy at Tenabang?" It made an oblique reference to the possibility that someone might have been using Winata's name, so that Winata would get the blame, Harymurti said in court. And the question mark in the headline indicated uncertainty, he said.

Tempo was planning a bigger investigative piece when, on March 8, about 200 Winata supporters gathered outside its office. Television news footage showed some trying to break down an iron gate.

The protesters demanded to know the source of Tempo's article, Taufik said. One man, Taufik recalled, asked him, "Why were you writing about my boss?"

Several other people, Taufik said, kicked and punched him, some tearing his shirt. They shouted, "Kill him! Burn the building!" he said.

Two days after that, Winata filed a complaint against Tempo at the Jakarta police station. Central Jakarta chief prosecutor Salman Maryadi said his staff reviewed the police investigation and found that Winata's complaint was valid.

The state charged Harymurti, Taufik and the article's copy editor with deliberately publishing a false report that gives rise to a public disturbance, and also with criminal defamation, laws dating to the Dutch colonial era and the early years of independence. Prosecutors have asked for two-year sentences. A verdict is expected Sept. 6.

Harymurti said the magazine cannot be responsible for the actions of people who might or might not have read the article.

Tempo's struggle does not end with the criminal case. Last year, Winata's lawyers filed four civil defamation cases against Tempo and the Koran Tempo newspaper and Tempo's founder, Goenawan Mohamad. Tempo lost three of the four. In one case, a court ordered Tempo to pay Winata $1 million and to apologize. All the cases are on appeal.

Winata denied in an interview having submitted a proposal to renovate the market. He recounted how he had grown up poor, the son of a spare-parts trader, dropping out of seventh grade and peddling homemade ice pops to help support his family. "So I never wanted to touch a business that would affect poor people," he said. "Never!"

Winata also said he did not order the assault on Tempo. "I totally disagreed with what happened at the Tempo office," he said. Winata said he did not want Harymurti to go to prison, but did want to clear his own name. "If tomorrow, he said to me, 'Tomy, yes, I'm wrong.' If I get only this one phrase from him," he said, he would withdraw his complaint.

What sets Tempo's case apart, analysts said, is that the state took up a criminal prosecution on behalf of a private citizen. It shows "the failure of this government . . . in appreciating the role of freedom of expression in the democratizing process," said Nono Anwar Makarim, a noted lawyer. Tempo, banned in 1994 and then reopened after the dictator Suharto was ousted in 1998, plays a pivotal role in developing that democracy, supporters said.

But Harymurti, who was Tempo's U.S. bureau chief in the 1990s, said he believes that after decades of authoritarian rule, Indonesians might not be ready to appreciate the role of the press.

"I hope we're not too far ahead," he said. "You need a critical mass of people to fight for their own freedom."

Journalists said they feared that the Tempo case could have a chilling effect and result in self-censorship. At least 15 defamation cases have been filed against the media in the last two years, four of them criminal. Two criminal cases targeted a newspaper for headlines that allegedly insulted President Megawati Sukarnoputri, Sukarno's daughter, and the House of Representatives speaker. The other two involved Tempo.

Meanwhile, at Tanah Abang, a deep brown gash in the earth full of earthmovers, cranes and construction workers is all that is left of Block A, the burned building. Thousands of vendors who lost their kiosks are still unsure of their future. Some have moved to other areas of the market. Others moved out altogether. City officials said they have not decided what will become of it.

Special correspondent Natasha Tampubolon contributed to this report.

Tempo Magazine reporter Ahmad Taufik faces a possible prison sentence over his story speculating about a businessman's role in a suspicious fire.Editor Bambang Harymurti said the story satisfied "all necessary requirements."Taufik shows the notes he took. He wrote down the name of the businessman, saying he saw it in the document.Tomy Winata won a $1 million judgment against the magazine, which is appealing.