AOL Time Warner is considering selling its book division, which houses authors such as Margaret Atwood, Iain Banks and Edwina Currie, in order to pay some of its heavy debts.

Richard Parsons, chief executive of the beleaguered media giant, has stated his top priority for the year is to reduce some of the £16bn debt burden.

The book division, which includes Little, Brown & Company and Warner Books, is one of the largest publishers of mass market paperbacks in the US and has built a thriving business books division.

The company has retained Merrill Lynch to sound out potential buyers but analysts are sceptical about whether AOL Time Warner will find a buyer in the ongoing downturn.

The sale could raise about £200m and, while this is a drop in the ocean compared with the overall debt, analysts say it would show AOL Time Warner is determined to reduce its debt.

The sale plan is part of a wider disposal strategy Mr Parsons is trying to implement following the the departure of the company's chairman, Steve Case, earlier this month.

There are also plans to unload AOL Time Warner's three Atlanta sports teams, including the Braves baseball team, as well its joint venture interests in cable channels Court TV and Comedy Central.

Bertelsmann, which owns Random House, and News Corporation, which owns HarperCollins, are among those tipped to bid for all or part of the book business.

AOL Time Warner, which has interests ranging from news channel CNN to Time magazine to the film and music companies behind Lord of the Rings and Madonna, has been forced to try to sell some of its non-core assets following an alarming slump in the company's fortunes.

Following the merger of AOL and Time Warner in 2000, the combined company's stock price slumped by 70% because of the poor performance of the online division, the wider advertising downturn and concerns over the direction of the company.

Mr Case fell on his sword earlier this month in an effort to restore shareholder confidence, leaving the board dominated by veterans from the Time Warner side of the company.