Leeds go down in disarray

In another controversial move that infuriated creditors but was described as inevitable by Bates, the club's relegation to League One was confirmed by the 10-point penalty that comes with administration.

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While Bates went on the offensive and blamed previous regimes for the club's huge debts, it emerged that the likely fall-out will leave manager Dennis Wise with a largely untried squad who may struggle to stay afloat even in the third tier.

It is understood senior players such as David Healy, whose spectacular scoring record with Northern Ireland has attracted interest, Derby target Richard Cresswell, Robbie Blake, Kevin Nicholls, Jonathan Douglas and Shaun Derry will leave.

Leeds will seek replacements on a maximum of £5,000 a week. In some cases, players will pursue a move rather than drop into League One, while other departures will be driven by a need to slash the wage bill.

One insider said: "It was already going to be difficult because Leeds were always going to be such a target in League One.

"It was guaranteed others would raise their game. If all Leeds are left with is a bunch of kids on two or three grand a week, you dread to think what might happen."

Concerned players were addressed yesterday afternoon by former chief executive and director of the new Leeds United FC Ltd, Shaun Harvey, and further meetings are planned with the players' union on Tuesday.

Creditors are due to meet later this month to consider the latest developments but several are already querying how debts that were described as manageable less than a year ago have spiralled to around £35million.

Bates attempted to turn the tables on any critics by blaming some of his predecessors and hailing a new boardroom triumvirate of himself, Harvey and solicitor Mark Taylor as a fresh start.

He said: "Going into administration brings to an end the financial legacy left by others that we have spent millions trying to settle.

"But the important thing now is not to view this as the end, but the beginning of a new era. The financial burden of the past finally pushed the club into administration following the issuing of a winding up petition by HM Revenue & Customs, who will be one of the company's major creditors.

"The other parties who will suffer the biggest financial loss are institutions from which the board arranged funding: Astor Investment Holdings, Krato Trust and Forward Sports Fund, who collectively will lose in excess of £22m."

Former Leeds director Melvyn Levi, who is understood to have nearly £2m at risk, said: "Once again, those who do not have a voice — the fabulous and truly loyal fan base and small creditors — are being dealt the worst possible hand.

"I hope a Yorkshire knight in shining armour will charge in and rescue this once-great club. The present owner has brought this club to its knees. Let's make sure the creditors do not settle for another Bates regime."

By going into administration before their relegation had been confirmed, Leeds avoided starting next season with a 10-point penalty.

The deduction will be made from their current Championship tally, though the new arrangements still hinge on creditors agreeing to forego at least some of their debt.

If they consent to the formation of a newly-named club at Elland Road, it would just remain for the Football League to give the sale its approval.

Bates admitted the door was still open to new investors, saying: "Since January 2005 we have followed up every approach received but refused to deal with unnamed consortiums represented by third parties, if indeed they ever existed.

"To avoid time-wasters we have always required proof of funds first, whereupon they often disappear."#

The Inland Revenue are particularly unhappy with the haste of the deal and want to know if there are any alternative offers.

They will not allow Leeds to escape paying an estimated £5m VAT and tax bill.

There is also concern about the involvement of Harvey, who was twice involved in financial meltdowns at Bradford City before moving to Elland Road.

Kevin Blackwell, who is suing for £700,000 compensation after being sacked as manager last September, is now likely to receive nothing.

Leeds' problems also extend to the training ground, where manager Wise has had a huge row with captain Jonathan Douglas and clashed with several players, including deposed skipper Kevin Nicholls.