Kelvin MacKenzie, the former editor of The Sun, yesterday threw in the towel at Highbury House Communications just three months after wresting control.
He stepped down as executive chairman and quit the debt-laden magazine publisher, whose shares were suspended earlier this month after refinancing talks broke down.
Mr MacKenzie, who stumped up around £1.5m to build a 20 per cent stake in Highbury, said: "I gave it my best shot, but was defeated by a mountain of debt which had been accumulated over the past three years."
Those debts stand at £29.5m, dwarfing Highbury's modest £2.2m market value.
The company, which publishes lads' mag Front and a string of special interest titles, has seen its shares plunge from north of 65p in early 2001, to 10p in January, to only 0.7p when suspended.
That has slashed the value of Mr MacKenzie's holding to a touch over £440,000.
Highbury paid the price for over-expansion and has been fighting for survival since Future, a rival magazine publisher, pulled out of a £96.5m takeover in April after competition problems.
It cleared part of its debts by selling 38 magazines to Future, leaving 30 titles. The company reportedly knocked back an approach from a former Highbury executive looking to buy those titles earlier this month.
Mr MacKenzie bought his way into the boardroom after his attempted management buyout of the radio company The Wireless Group collapsed. A boardroom cull followed, with the last director in place before he took over leaving less than a fortnight ago.
The collapse of talks with its banks to swap some of its debt for shares fuelled mounting concerns for Highbury's future.
Should refinancing fail, administration looks likely. Rivals thought to include Centaur and IPC Media are circling. Highbury declined to comment.Reuse content