News Limited glitter strip daily the Gold Coast Bulletin is preparing for a purge of its senior ranks as rumours intensify that editor Dean Gould will follow managing director Steve Howard and exit the paper in February.

Crikey understands that internal News candidates are forming an orderly queue to succeed Gould after the out-of-favour helmsman took the unusual step of returning from holidays on Monday to scotch reports of his imminent demise.

Gould, who has served for just 18 months in the Bully‘s corner office following the retirement of Rupert Murdoch favourite Bob Gordon, has been under increasing pressure as his paper’s circulation nosedived, despite the Coast’s rapidly increasing population. An expensive revamp in March has also failed to bear fruit, with readers complaining that important stories went unread under a barrage of bikinis and ostentatious graphics.

However, Crikey has been told that substantial pressure is now being applied from News Limited’s senior ranks in Sydney and that Gould’s days are numbered.

Circulation for the Bulletin‘s Saturday edition — the newspaper’s main cash cow that relied upon the crumbling Gold Coast property market for succour — has recorded 9% declines as Gould’s attempts to flush his dwindling rivers of gold with fresh cash failed. A lack of scoops has also been cited.

“Circulation is plummeting and Dean has lost the confidence of the newsroom,” one Bulletin insider told Crikey this morning. While scuttlebutt had been doing the rounds for months, the source said a shift to another role, possibly in the News graveyard of project management, was now a fait accompli: “He’s terminal and it’s definitely happening this time,” they said, adding that CEO John Hartigan had also lost confidence in his charge. Editorial director Campbell Reid is believed to be his only remaining backer, but his support may also be rapidly eroding.

News figures in strong contention for the poisoned chalice include successful Townsville Bulletin editor and former Gold Coast Bulletin chief-of-staff Peter Gleeson, Daily Telegraph deputy editor Mick Carroll (who is said to have been doing excellent work recently under the tutelage of Gary Linnell), and energetic Gold Coast Sun editor Shane Watson, although he is considered a rank outsider.

Under one scenario, Gleeson would take up the Gold Coast gig with Manly Daily editor Luke McIlveen sent north to Townsville. The Far North Queensland masthead has grown in News’ estimation after its award-winning coverage of the Storm Financial saga and its gong as News’ 2009 regional newspaper of the year.

Last weekend, in an indulgent Bulletin puff piece penned by Nick Nichols (not online), the paper announced that general manager Howard, a former Tele editor, would be heading back to an unnamed role at Holt Street for “family reasons” and that his sons had been accepted “against all odds” as students at the exclusive St Ignatius College in Sydney’s Lane Cove. However, others say Howard fell on his sword following discussions over the paper’s direction with Hartigan.

He will be replaced by Sylvia Bradshaw, formerly general manager at News Limited’s Melbourne suburban Leader stable, whose expertise in snagging real estate contracts is thought to be highly valued within the News hierarchy. Those skills would be put to the test in a depressed Gold Coast market still suffering under the weight of the GFC.

Gould came under scrutiny from News Limited headquarters in June after Crikey revealed that prominent columnist, government lobbyist and good mate Graham Staerk had been writing positive stories on Gold Coast entities that would later become his clients.¬†Gould did not respond to Crikey‘s request for comment this morning.