Barton back in the Newcastle fold but the troubled midfielder is axed by Nike

I'm free: Joey Barton leaves Manchester's Strangeways Prison on Monday

Following a lengthy meeting in a Newcastle city centre hotel with Barton, his agent Willie McKay, manager Kevin Keegan, football director Dennis Wise and chairman Derek Llambias, the club announced the midfielder will be free to restart his career at St James' Park.

But while Newcastle are prepared to stand by the 25-year-old one-time England international on his release from prison for a vicious assault, Nike revealed they have given up on him. His four-year contract was worth £40,000 a year.

'We have provisions in all our sponsorship contracts to take into account any actions by athletes that bring the brand into disrepute,' Nike spokesman Leo Sandino-Taylor said. 'Whilst Joey Barton is a talented footballer, we cannot condone or accept what he did and his contract with us has been terminated.'

The issue of Barton's future may be the biggest Keegan and the club have had to confront since he returned to Tyneside in January, and their stance has resulted in widespread condemnation from the world of football and beyond, but Newcastle refused to reveal any details of the showdown beyond their official statement.

Although prepared for the onslaught of negative reaction since Keegan announced he wanted to give Barton a second chance at the weekend, Newcastle now appear determined to bury their collective heads in the sand as Barton starts his pre-season training in solitude.

The statement said simply: 'Newcastle United officials can confirm they have met with Joey Barton following which it has been agreed by everyone involved that Joey will remain with the club. The club will not be making any further comment on the matter.'

United would not even confirm if billionaire owner Mike Ashley was present at the meeting, which was the first face-to-face encounter between the club and Barton, who was released from prison on Monday morning after serving 74 days of a six-month sentence for assaulting a teenager in Liverpool two days after Christmas.

It has emerged that Newcastle attempted to send club lawyers to visit Barton in Strangeways Prison in Manchester at the start of his sentence, but the move was blocked by prison officials.

At that point Ashley wanted to sack Barton for bringing the club into disrepute, and certainly wanted to start negotiations on him accepting a 50 per cent reduction in his £71,000 a week wages.

But as the reality of Barton's release started to dawn on club officials, they were forced to accept him back. Newcastle have since spent months trying to offload him without success, but they were not prepared to let a player who cost £5.8million a year ago leave on a free transfer.

Although it is understood some of Barton's bonus payments have been renegotiated, he was not prepared to consider a pay cut. He was, however, not paid while in jail.

As the uneasy truce between all parties starts, the rest of the Newcastle squad fly to Majorca on Wednesday to play in the Summer Cup there. Barton, meanwhile, will be working with condition experts at the Newcastle training ground.

But he will not be wearing Nike equipment after the company confirmed they cancelled his contract immediately after his trial in Liverpool.