Black wants a fortnight to raise money for $20m bail

He has told a court in Chicago that he is close to selling his stake in Horizon Operations, which owns community newspapers across North America, to raise money to pay tax bills.

The revelation of the peer's latest financial juggling act came in documents posted in response to prosecution demands that he should put up more money or be imprisoned pending his trial next year. Federal prosecutors had alleged that Lord Black made a string of misleading claims about his assets when negotiating bail.

That claim was denied by Lord Black's lawyers, who will use a hearing scheduled for Monday to ask for a two-week delay to conclude the Horizon sale. Horizon was formed by Lord Black and David Radler, his long-standing business lieutenant, who has agreed to testify against him.

Lord Black may be jailed for the rest of his life over allegations that he looted at least $92m from Hollinger International, the holding company for a media empire that spanned the UK, the US and his native Canada. An internal investigation triggered by outside shareholders in 2004 found that Lord Black had presided over a "corporate plutocracy" at Hollinger that funded a lavish lifestyle for himself, his wife, Barbara Amiel Black, and other trusted executives. David Radler, the former publisher of Hollinger's Chicago Sun-Times, pleaded guilty and is co-operating with the Justice Department.

Lord Black insists he never broke the law and will be exonerated, but he has lost control of his empire.

The terms of his bail allow him to travel between Canada, the court in Chicago and his second home in Florida, but prosecutors want the home sold. They claim Lord Black's equity in his waterfront mansion in Palm Beach is much less than he told them when negotiating bail last year, because Canadian tax authorities also have claims secured on it. Lord Black failed to pay the mortgage last month, and his lawyers said proceeds from selling his Horizon stake back to the company would be used to pay off the tax liabilities.

He also insisted that he had not misrepresented his assets by saying he controlled a company that was jointly owned with his wife. Lord Black owns all the voting shares, his lawyers said.