The Supreme Court of Canada hosts a showdown Wednesday between the press and lawyers for Le Groupe Polygone, a Montreal-based media company, in a case closely watched by Canada's journalism community.

Polygone is seeking to identify an anonymous source who had provided key information about the Quebec sponsorship scandal to Daniel Leblanc, an Ottawa-based reporter for The Globe and Mail.

The company is defending itself in a $35-million lawsuit launched by the federal government to recoup sponsorship money paid by the former Liberal government.

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The most contentious aspect of the case dates from mid-2007, when a Quebec Superior Court judge required 22 people - mostly government workers - to state under oath whether they had provided Mr. Leblanc with sensitive information.Polygone's lawyers wanted particularly to learn the name of a source identified as MaChouette.

Lawyers are hopeful the case will help create a constitutional privilege protecting journalists' sources.