Three years ago, Rupert Murdoch coveted the New York Times but was forced to settle for buying the Wall Street Journal. Now, the tycoon is using the considerable resources of his media empire to try to sink the newspaper that denounced his purchase of the Journal, by launching an advertising price war and a challenge to the Times's lead in reporting New York.

The Wall Street Journal is spending $15m on a new metro edition today, promising in-depth coverage of New York politics and life, in an attempt to wrestle readers and revenue away from its debt-ridden rival and ultimately bring it down.

"It's a spear thrust right at the Times, intended to embarrass and bleed the Times," a senior Journal editor told New York magazine about his paper's management earlier this year. "The idea of the New York Times as a burning, sinking ship is something they fantasise about at night."

Last month, Murdoch publicly derided New York Times journalism, which sometimes reflects the paper's nickname "The Grey Lady". He accused it of "overlooking" its home city after cutting back on local coverage as its financial problems have deepened.

"We believe that in its pursuit of journalism prizes and a national reputation, a certain other New York daily has essentially stopped covering the city the way it once did," he said.

The Journal is planning 10 pages of daily coverage of the city and has recruited 35 reporters for the new metro section, including several from the defunct New York Sun.

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