Paramount Told Negotiators, 'We're Done,' Next 48 Hours Critical

Paramount told California officials negotiating a settlement Tuesday, "we're done" ... and said the studio was moving out of California, but our sources now say they are back at the bargaining table, but the clock is running out.

Sources directly involved in the negotiation tell TMZ ... State and L.A. officials were planning on a statement from Paramount Tuesday, announcing its move out of Cali. But, one key source says, "We're back in a constructive place, but still in a red zone." The source adds, "It's by no means terminal, but the next 48 hour are critical." We're told if a settlement is possible, it's gonna come in the next 2 days ... otherwise, it's not going to happen.

Sources describe the negotiations as "tense."

Paramount's threats center on a lawsuit brought by the California Attorney General and other states, trying to block the studio's acquisition of Warner Bros.

David Ellison has been threatening to leave the State unless the A.G. backs off.