As he languishes in a Florida prison cell, press baron Conrad Black might permit himself a nostalgic smile.

Canada's largest media company, Canwest Global Communications, has filed for bankruptcy protection, laden with debt incurred in an ill-considered deal with the notoriously ruthless fraudster who once owned the London Daily Telegraph.

Struggling to pay its bills and facing a crisis of confidence among advertisers, Canwest filed for protection for some of its operations, including the National Post newspaper, from its creditors at a Toronto court this month. The move could lead to a break-up of an empire spanning Canada's Global Television network, and a roster of press titles including the Montreal Gazette, the Ottawa Citizen and the Vancouver Sun, and part-ownership of BBC Canada.

It is difficult to overstate Canwest's influence in Canada. It's an extraordinary story of acquisitive growth.

The company was founded in 1975 when a chain-smoking former provincial politician, Israel "Izzy" Asper, bought a North Dakota radio station and had its transmitters trucked to his home town of Winnipeg.

As its collection of pre-eminent Canadian media properties swelled, the company horrified those on the left with its eager dissemination of neo-conservative philosophy and hawkish views on the Middle East.

Its bankruptcy filing is a severe blow to a dream of international influence harboured by Asper and his children, who wanted Canwest to rank alongside global giants such as News Corp and Viacom.

Experts trace its downturn to a deal in 2000, when the firm was out-foxed by the cunning of Black, who sold Asper a stable of top newspapers for C$3.2 billion ($4 billion).

"That was the start of the unwinding," says Todd Johnson, a portfolio manager at BCV Asset Management in Winnipeg. "I don't think you can say they ever got the returns from that newspaper business they expected and the deal was financed with high-cost debt."

The transaction with Black was classic brinkmanship. Frustrated by the limitations of news broadcasting, Asper was keen to build a press platform through which he could expound his political views. Meanwhile, Black, a fellow conservative media mogul, had decided that the fortunes of the newspaper industry had peaked.

According to evidence at his fraud trial in 2007, the peer gave Asper the impression there were rival bidders in the wings for his Southam collection of papers. In fact, there were none.

"Conrad sold him those papers at the very height of their value. It was almost the week, the day, when they peaked," says journalist Peter Newman, author of a biography of Asper. "Here, being offered by Conrad at one swoop, were the most powerful newspapers in Canada. It was a very tempting proposition."

Canwest borrowed the funds to purchase Black's papers at 12 per cent interest and then, further weakening its balance sheet, bought a television network covering western Canada for a further C$900 million.