Leeds: We may go bust

Leeds United plc admitted for the first time today that they may go bust after a restructuring of their £80million debt mountain fell through.

The news sent Leeds United plc shares plunging more than 20 per cent on the stockmarket to just 2.75p each, a whisker above their all-time low.

The club, bottom of the Premiership and a British club record £49.5m in the red for last season, desperately needs a £4.4m cash injection to cover its day-to-day running costs and pay its players.

But in a statement to the Stock Exchange today, the club said: "After a long period of constructive discussions, negotiations have failed to reach a satisfactory conclusion. If the negotiations are unsuccessful, the directors may be forced to seek the protection of an administration order."

The money had been promised by its deputy chairman Allan Leighton, the boss of the Royal Mail, alongside a mystery investor understood to be Bahrain multi-millionaire Sheikh Abdul bin Mubarak al-Khalifa.

However, it is understood Leighton and the sheikh were unwilling to inject money until US investors in £60m worth of bonds mortgaged against the club's future gate receipts agreed to cut the annual interest bill on repayments.

Under Stock Exchange rules, an agreement was needed in time to be posted out to shareholders a month ahead of its annual meeting, which has to be held by the end of the year.

The news also makes it unlikely Leeds can raise the money to attract a new manager after Peter Reid was sacked earlier this month.