Unless a court approves a plan to move the National Post into a company with Canwest's other newspaper holdings by Friday, the paper's owners will shutter the paper, court documents have revealed. (Nathan Denette/Canadian Press)

The National Post newspaper will cease operations unless a Toronto court approves a new ownership structure for the paper by Friday, the paper's owners say.

A committee overseeing the company's restructuring "has made it clear it would not continue to allow the funding of the losses of the National Post past Oct. 30, 2009," a Canwest Global Communications Corp. court filing released Thursday says.

"In the absence of any funding for its operating losses, it is doubtful that the National Post could sustain its operations."

Earlier this week, Canwest announced it had reached a deal that would allow it to transfer ownership of the paper into its newspaper unit, to be known as Canwest Publishing Inc. The National Post has been segregated from the Canwest newspaper unit since 2005, when the other newspapers were spun out into an income trust.

Canwest still needs to get court and senior lender approval for the transaction it offered on Tuesday. The deadline for that decision is Friday, Oct. 30.

The company has been under court protection from creditors since last month. The newspaper has lost more than $60 million in earnings before interest, taxes, depreciation and amortization in the last four years, Canwest CFO John Maguire revealed in the filing. The National Post Company currently has 277 employees.

The announcement comes amid speculation that Canwest, which is seeking court protection from its creditors, is preparing to sell its newspaper division.

Industry analysts say Canwest could fetch more than $1 billion for its newspaper assets as signs of life in the finances of the newspaper industry drive up interest in acquisitions.

Canwest newspapers include the Montreal Gazette, Ottawa Citizen, Calgary Herald, Edmonton Journal, Saskatoon StarPhoenix, Vancouver Sun and the Victoria Times-Colonist.