IVANOVO, Central Russia -- For two years a gutsy little newspaper has been waging a David-and-Goliath battle for press freedom with the old-guard communist nomenklatura in this grim, economically depressed factory town.


Budni, a 16-page weekly, has dedicated itself to taking on the powers-that-be in Ivanovo, about 300 kilometers northeast of Moscow. It was founded in November 1992 by a group of young journalists in search of a challenge.


"We wanted an independent paper, something unheard of in Ivanovo," said Mikhail Smirnov, the paper's editor. "We wanted to find a new means of expressing ourselves, a combination of journalism and literature."


The result was Budni, an irreverent, straight-talking newspaper that has devoted itself to exposing official corruption while covering the latest developments in the world of unofficial culture.


Budni's crusader spirit has a way of getting under the skin of the local authorities, many of whom have taken the newspaper to court under an article of the press law that prohibits attacks on the "honor and dignity" of public officials.


"We have had so many lawsuits filed against us that I can't even keep track of them," said Smirnov. "But we have only lost once."


Last year the paper was forced to pay damages of 150,000 rubles ($50) to the head of the regional administration, Adolf Laptev, who had taken it to court several times already without success. He eventually managed to win a case over a report in the paper that said his apartment had been burgled.


In July, the local prosecutor's office brought criminal charges against Smirnov for pornography: The paper had published an article on a telephone sex line in the region, with an annotated transcript of one "transaction."


The case is now at a standstill while the court awaits the judgment of a panel of experts. Smirnov insists the case was politically motivated: "Gennady Panin, head of the regional police, filed the charge three separate times, because the courts kept throwing it out," he said, "he is trying to close us down because we have printed charges that the police use torture on detainees."


Panin was reluctant to comment in a telephone interview since, he said, he had no way of knowing who he was talking to. He did, however, admit that he is the instigator of the pornography charge, but denied any hidden motives. "Budni is my favorite paper," he laughed. "Why not have a scandal sheet in town, if that's what people want?"


Panin has recently been mentioned in an article in Izvestia dealing with torture in the Ivanovo region, but declined to comment.


Vladimir Rakhmankov, the deputy editor, exemplifies the paper's challenging tone.


"We are an anti-communist newspaper," he said. "Actually, we are against thieves. And everyone in power is a thief. And everyone in power in Ivanovo is a communist."


Alexander Redkin, head of an independent labor union in Ivanovo, agreed. "We are in the grip of the 'red directors,'" he said, using the term for the old-style communist nomenklatura that still runs much of the country's industry. "They are just trying to drive the factories into the ground, on the principle that the worse things are, the more opportunity they'll have to steal."


Redkin and two colleagues staged a hunger strike last March to attract attention to the plight of workers at their factory. Redkin was liberal in his praise for the efforts of Budni in publicizing their action.


"Budni really supported us," he said. "The other newspapers just ignored it."


Sergei Valkov, head of Ivanovo's Human Rights Organization, was similarly appreciative: "Budni is the only paper that will write about human rights violations." The paper now has a circulation of 28,000, which will increase to 40,000 in January, when Budni changes publishers.


Smirnov claims that Budni is self-financing, and will eventually be profitable. "We can make enough money out of advertising to keep ourselves going," he said.


The paper has a fairly low overhead -- there are only seven regular employees, who work out of a two-room office with a minuscule darkroom. But the atmosphere is upbeat.


Budni devotes a lot of space to the economy -- a sore subject in Ivanovo, a textile town where the unemployment rate has soared to 20 percent in the past year.


Along with economic exposes are literary offerings and feature articles on topics as diverse as privatization to the search for Anastasia, the last tsar's youngest daughter. The paper also runs personal ads, crosswords, and jokes.


As a final tribute, Budni recently joined the growing ranks of newspapers being sued by Vladimir Zhirinovsky, who took exception to the line of an article in Budni where he is termed a "liberal demagogue."


"It's funny that he picked on that one," laughed editor Smirnov. "We had written about him before, saying calling him a fascist would be giving fascism a bad name, but he didn't react."