Here is what I do -
For a 12 inch block, I would use unprinted newspaper For anything smaller - I use cheap copy paper - It is harder to get out than the foundation paper but here is what I do to counteract that
Use a smaller stitch length when sewing. When ready to remove, fold the paper on the seam line and crease with fingernails and then tear backing off (if the paper still does not want to tear off cleanly - Dip a Qtip in water and damping the seam - let sit for a minute and it will come off cleanly).