Kevin Keegan has revealed that he left Newcastle after being told to sign a player by Dennis Wise that he had only ever seen play on YouTube.

The transfer row came to light after Keegan won £2million damages against the club for wrongful dismissal. There was anger on Tyneside, though, as it also emerged that Keegan had wanted a £25m payout, a sum that would have financially crippled the club and owner Mike Ashley, who is desperate to sell the Championship outfit. The 58-year-old had claimed £8.6m in salary and other benefits to which he would have been entitled had he seen out the remaining years of his contract, which was due to expire in June 2011, and a further £16.5m in “stigma damages” in compensation for the effect of the saga on his future earning capacity. In the end, Keegan had to settle for £2m and insisted that his decision to quit the “club that I love” for the second time was “the most difficult I have ever had to take in my life”.

Keegan resigned last September in protest at the club's transfer policy when Uruguayan Ignacio Gonzalez was signed on loan on the final day of the summer transfer window against his wishes.

Newcastle insisted at the hearing that Keegan, who had replaced Sam Allardyce as manager in January last year to launch his second spell as manager, always knew the club intended to employ a “continental model”, with a director of football — Wise was later appointed executive director (football) — overseeing recruitment.

Keegan was adamant that he did not want midfielder Gonzalez — who cost the club £1m in wages and only played twice — and the tribunal heard that Wise told the manager to go and watch the player on YouTube. Then, when he still refused to sign the Uruguayan, Keegan was told the deal would be done anyway as a favour to two South American agents.

In a lengthy statement issued today Keegan said: “I resigned because I was being asked to sanction the signing of a player in order to do a favour' for two South American agents. No one at the club had seen this player play and I was asked to sign him on the basis of some clips on YouTube. This is something that I was not prepared to be associated with in any way.”

Newcastle refused to make any comment on the matter today but the initial reaction amongst the Toon Army to the fact that Keegan wanted £25m was one of shock, with one fan claiming that Keegan was motivated by “greed and no regard for the club or its fans”.