Towering over the secret hiding place between two canals and the most handsome terraces in Amsterdam, the horse chestnut stands proud and tall.

But Anne Frank's tree is sick - terminally so, according to Amsterdam city council, which wants to put it out of its misery with an axe and chainsaw. Conservationists say it may be sick but that it is a symbol that can be saved. They are battling to stop the felling of the 22-metre (72ft) tree that comforted the girl who embodied courage in the face of barbarism.

Lawyers, tree surgeons, politicians and bloggers are all in a mighty battle over the fate of the 150-year-old chestnut. "It's certainly diseased and it needs to be taken care of," said Edwin Koot of Utrecht's Tree Foundation, leading the campaign to save the tree. "But we can put a construction around the trunk and even if it breaks, there will be no damage."

Hans Westra disagrees. The director of the Anne Frank Foundation is worried about the impact of a storm and the risk to the building where Anne's family hid from the Nazis for two years. "The facts that I have are that the living wood in the tree is diminishing very fast. Last year it was down to 36%. Now it's 28%. The experts say a tree has to be cut down when the living wood is under 33%. "

The tree was still standing yesterday, despite the council's plan to send in chainsaws, lumberjacks, scaffolding and tower cranes to bring it down at dawn. A stay of execution was granted late on Tuesday by Judge Jurjen Bade after Koot's foundation appealed. The judge ordered both sides to reach a compromise within weeks. Felling, he said, should be the last resort.

That scotched Charles Kuijper's hopes of a lucrative trade. The neighbour picked up one of the tree's fruits from the garden and hawked it on eBay as "the last chance to get an original chestnut ...Grow your own Anne Frank tree anywhere".

"Terrible, this merchandising," said Westra. "Anyone who buys it is completely stupid." But bidding has hit $10,000.

Hidden in a secret annexe, Anne watched the tree through the only piece of glass that was not blacked out. Decades after she died in Bergen-Belsen camp, her father, Otto, dwelt on what the chestnut meant to Anne. "She longed for it during that time when she felt like a caged bird. How could I have suspected ... how important the chestnut tree was to her."

Anne wrote in her diary of the hope the tree gave her. "Nearly every morning I go to the attic to blow the stuffy air out of my lungs. From my favourite spot on the floor I look up at the blue sky and the bare chestnut tree, on whose branches little raindrops shine, appearing like silver," she wrote in February 1944. "As long as this exists, I thought, and I may live to see it, this sunshine, the cloudless skies, while this lasts I cannot be unhappy."

Two months later, she noted: "April is glorious ... Our chestnut tree is in leaf, and here and there you can already see a few small blossoms."

And a month later, weeks before the Nazis arrived: "Our chestnut tree is in full bloom. It's covered with leaves and is even more beautiful than last year."

The tree remains majestic but no longer so beautiful, its leaves browning and dropping prematurely due to infestation by leaf miner moth. The bigger danger is from the honey fungus rotting the trunk and bark. Experts are at odds over whether the fungus devours living wood as well as dead wood. Further tests are to be carried out.

"The mass of decaying wood is progressing and it's not safe," said Henk Werner, who has monitored the tree for 12 years. "It's not that we want to kill it. It's already dying. It won't get better. But because of all the emotion and commotion, the judge has made a political decision."

Westra wants to replace the tree with a genetically identical sapling grafted from the parent. "They might be able to save it with the steel cables. But that won't be the same tree that Anne Frank saw from her secret annexe."