UPDATE 1-Los Angeles Times editor O'Shea fired

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LOS ANGELES, Jan 20 (Reuters) - The editor of Los Angeles Times, James O'Shea, has been fired over a budgetary dispute only 14 months after he took over the post, the newspaper said on Sunday.

O'Shea, a veteran of the Chicago Tribune who was hired by the Times in November 2006, was fired by publisher David Hiller after he refused to carry out some $4 million in cuts, said the newspaper on its Web site, citing an unnamed source. The news was first reported by The Wall Street Journal.

The firing comes one month after the paper's parent, Tribune Co, completed an $8.2 billion buyout led by Chicago real estate tycoon Sam Zell.

The deal restructured Tribune as an employee-owned company funded largely by debt.

The Times has struggled along with other media companies in an adverse newspaper advertising environment, and has cut staff and editorial resources in recent years.

Zell, who remade Tribune's board of directors as he assumed the roles of chairman and chief executive of the restructured company, has said repeatedly he will not interfere with editorial decisions, but would make regional executives like Hiller strictly accountable for their papers' financial performance.

At a December news conference, Zell said that Tribune had overly focused on cutting costs and had short-changed attempts to increase revenue.

O'Shea is the third editor since 2005 to leave the Times. In late 2006, former editor Dean Baquet also was ousted after a dispute with Hiller over cost-cutting.

Neither O'Shea, Hiller, Zell, nor a Tribune spokesman could be reached immediately for comment. A spokeswoman for the Times said she had no comment at the present time.

The Los Angeles Times reaches over 1.2 million subscribers on Sundays. (Additional reporting by Paritosh Bansal) (Reporting by Alexandria Sage; editing by Carol Bishopric;)