The North West Enquirer has gone into administration five months after it launched as an up market region-wide paper.
The move was prompted by news this morning that one of the paper's backers had changed the conditions on a £200,000 financing package.
Some 25 members of staff, including 15 journalists, were told at 2pm today that they would lose their jobs and editor Bob Waterhouse said he would not continue his involvement with the paper.
He told Press Gazette: "We are not going to finish the paper tonight. We don't have the prospect of the funding package that we had we can't go on trading as it would be illegal to do so.
"I'm very sad, not just for me but for all the journalists and freelancers who have helped make it such a great paper."
In August the Enquirer made senior editorial redundancies and cut freelance budgets in order to save £250,000 demanded by investors.
Sales are believed to have dipped below the target of 15,000 to 20,000 to around 12,000.