When West Ham pulled off the biggest transfer coup in the club's history on deadline day in August 2006, it all seemed too good to be true.

Chairman Terry Brown had secured the signatures of two Argentinian World Cup stars and made the Hammers major players in the Premier League.

West Ham's loyal supporters were in dreamland. Would they really be about to watch Carlos Tevez and Javier Mascherano down at the Boleyn? The wish now must be they had never touched either with a bargepole.

True, Tevez scored the goal that kept the club up against his current club Manchester United but it is arguable that they would ever have been in that position in the first place if he hadn't moved from Corinthians.

His appearance in the dressing room caused much unrest. Mascherano was not the player he is now. He failed to settle and moved to Liverpool in January last year.

Tevez only started to perform when the club were in dire straits and although his efforts to keep the club up were seen as heroic, they could end up costing them dearly.

Already fined £5.5million by the Premier League after being found guilty of acting improperly and witholding vital documentation over the players' ownership, they are now facing a much more severe £30m penalty.

All the parties involved in the deal, Brown, manager Alan Pardew and the two players have now moved on.

Owner Bjorgolfur Gudmundsson and his new manager Gianfranco Zola are the ones likely to have to pick up the pieces.

Club officials have already insisted that they will fight on if an independent Premier League tribunal rule that the Hammers must pay that sum to Sheffield United who filled the final relegation spot at the end of the 2006/07 season.

They will need to fight. Such a huge sum, in the current financial crisis, could prompt a firesale of players in January. Former manager Alan Curbishley came under pressure during the summer to offload the big-earners in his squad.

Freddie Ljungberg was paid £6m just to get him off the books. Bobby Zamora and John Pantsil went to Fulham and offers were made for Craig Bellamy and Dean Ashton.

West Ham also lost their shirt sponsor two weeks ago when airline XL went bust.

Worse still, Gudmundsson, the Icelandic banking magnate who led the £98m acquisition of West Ham United two years ago, is set to bear the brunt of the collapse of XL Leisure.

He was the most substantial investor standing behind the mountain of debt which has funded XL for the past two years.

Gudmundsson is the chairman of Landsbanki, the Icelandic bank which lent the £143m that financed the buy-out of XL from its then parent company, the Icelandic stock exchange company Avion Group, in 2006.

That loan, however, was guaranteed by Avion, now a slimmed-down shipping and transportation group known as Eimskip, in which Gudmundsson is also a significant investor.

All of which makes tonight's Carling Cup tie with Watford a sideshow for Zola.

Saturday's win over Newcastle was achieved with an attacking verve that had given a fresh sense of optimism around Upton Park.

The Geordies arrived in east London in a mess and were thoroughly outplayed as David di Michele scored twice to give a renewed sense of expectation.

That could now vanish as the news sinks in about the damage that could be inflicted on Gudmundsson.

Sheffield United chairman Kevin McCabe said it would be "inappropriate" to discuss figures of compensation this morning.

But he previously said: "If you say that the Championship play-off game is worth £60m and Sheffield United's attendance last year was 31,000, with full hospitality boxes and restaurants and broadcasting income, you would say compensation is around £50m."

That figure may be unrealistic but what is no longer in doubt is that Zola must lift his team to perform at even greater levels in order to remain in the top flight.

West Ham simply could not afford to be relegated from the Premier League and miss out on the untold millions that comes with it.