The dilemma of state help for press: 'Will watchdog ever bite the hand that feeds it?'

Interesting Reuters piece here that was picked up by journalism.co.uk showing how a request for state aid to bailout failing newspapers in the US has provoked a debate about whether such help compromises the freedom of the press.
It follows a request by legislators in Connecticut petitioning the state government to step in and save two local papers from closure. But Paul Janensch, a journalism professor at Quinnipiac University in Connecticut, and a former reporter and editor sums up the dilemma of accepting state aid as:"You can't expect a watchdog to bite the hand that feeds it."
Reuters reports that in Connecticut the state's Department of Economic and Community Development is offering tax breaks, training funds, financing opportunities and other incentives for publishers, but not cash.
The US debate echoes a similar one in the UK when the editor of The Guardian Alan Rusbridger suggested state aid might be needed to save regional newspapers from folding. It provoked this response from Bob Satchwell, executive director of the Society of Editors:"No, No, No! the last thing any newspaper should do is accept subsidy from the state. The particular strength of the UK newspaper industry is its independence."