Paris — Ten years ago a group of alumni of the 1968 student riots started what they hoped would be a ''free-forum'' people's journal. Despite the guidance of Jean-Paul Sartre as inspirational guru, the newspaper Liberation was soon dismissed as a tasteless rag, and two years ago it was on the verge of extinction.
Today Liberation - or Libe, as it is known - remains France's most irreverent newspaper, but it has joined the ranks of the country's most readable and respected publications. In a press heavy with either polemic or long, turgid analyses, Libe stands out for its combination of hard-nosed reporting and snappy prose.
It is even beginning to challenge Le Monde for the position of the country's most influential paper. In two years, circulation has shot up from 40,000 to some 110,000, still far short of Le Monde's 360,000. But Libe is just about the only French daily to have gained readers during the recession.
''Liberation's the best daily,'' said Christian Fauvet, political editor of the newsmagazine L'Express. ''It's witty, serious, and complete. In comparison, Le Monde is boring.''
Libe's coming of age is the story of how the students of 1968 have mellowed and of how France has incorporated their youthful effervescence. Left-wing ideological dogmas have been shed, but a relentless questioning of authority remains.
''We represent our generation,'' Serge July, the paper's editor in chief, told the Monitor in an interview. ''We are liberal and libertarian: liberal in our defense of human rights, and libertarian in our skepticism of all power.''
Mr. July personifies this transformation. During the 1960s, he was active in a Maoist group called the People's Cause. A few suggestions of this radicalism remain. A cluttered desk sits in the center of an unpretentious office. On the wall hangs a framed copy of Libe's famous front page from the day of the royal wedding: a photomontage of the official engagement photo, depicting Prince Charles hugging a topless Lady Di.
At age 41, Mr. July has changed out of his jeans into a tie and jacket, and he issues orders in a brusque, confident tone. Not only has he earned a reputation for his well-reported, incisive political columns, but also he is credited with personally transforming what once seemed to be a hippie commune into a professional organization.
To accomplish this, he has been ruthless. In 1981, he shut down the paper for three months, firing half the staff, and hiring several business-minded managers and a whole new crew of aggressive young reporters. Gone forever is the paper's original philosophy of ''total democracy,'' under which each staff member received the same minimal salary and editorial decisions were made on a collective basis.
''We had to break away from our heritage, which was too ideological,'' Mr. July explained. ''I had another vision of journalism.''
This new vision borrowed heavily from the American example. July has taken several trips to the US to observe the press. He returned with a love of the quick, vigorous prose of such journals as the Village Voice and Rolling Stone, as well as admiration for the rigorous, objective reporting of the New York Times and other top American newspapers.
''The French press is archaic,'' he said. ''It is partisan and it reflects the values of 40 years past. Do you know that Le Monde never ran an article on rock-and-roll until 1976?''
Libe, meanwhile, reflects the concerns of the post-'60s generation. It writes voluminously about pop music - an interview with The Police was recently featured on Page 1 - and children of the computer age find up-to-date coverage of new technologies and social trends.
Libe has also challenged French journalistic tradition by emphasizing on-the-scene reporting over political commentary. It breaks more stories than other dailies, and now boasts a foreign reporting staff of eight correspondents, second in size only to Le Monde. Wherever a big story breaks, Libe prides itself on being there first.
''While everyone in Paris was writing tear-jerking stories about boat people from their offices, we went to Southeast Asia,'' said a boastful Mr. July.
Others agree. ''Liberation is closer to the information,'' said L'Express's Fauvet.
Combined with this emphasis on reporting is an emphasis on keeping facts separated from opinions. With Le Figaro and Le Quotidien voicing shrill right-wing views, and Le Matin and Le Monde often sounding like government mouthpieces, Libe's relative objectivity is unusual for France.
''They are less engaged than us,'' admitted Le Monde's managing editor, Jean-Marie Dupont. ''It's no longer a paper of the left.''
Mr. Dupont also admitted that his austere paper, with its small print, no photos, and lengthy articles with elaborate, almost Proustian sentences, is threatened by Libe's brash style. Le Monde lost 10 percent, or some 40,000, of its readers last year. Most worrisome, Mr. Dupont said, the paper is losing its young readership.
''Liberation seems to be a la mode,'' he said. ''We will have to draw lessons from that.''
Despite all this praise, Libe continues to run a deficit. Only loans from a group of liberal French business tycoons, including Jean Riboud, a personal friend of President Francois Mitterrand, have staved off bankruptcy. Losses for 1982 were some 10.5 million francs ($1.3 million).
But finance director Antoine Griset has launched an intensive effort to woo advertisers by publishing a survey showing that Libe's readers are young, well-educated, and affluent enough to afford adventuresome vacations and expensive stereo equipment.
The response has been better than expected, Mr. Griset reported, and he predicted that the paper will break even for the first time next year.
''Since we resumed publishing in 1981, we have been growing between 30 and 40 percent a year, and that's much better than we thought possible,'' he said. ''The future is just as bright.''