SOCCER: The financial crisis engulfing Leeds United deepened yesterday when the club, bottom of the Premiership, admitted for the first time that administration was a real danger.

Leeds owe £81.1 million to investors in Britain and America and must soon find £6 million to appease those creditors. If that money is not found the club are likely to be in administration in February, possibly earlier.

The immediate football implications of yesterday's statement from Leeds are stark. The chase to lever Gordon Strachan from Southampton to be the new manager will halt abruptly and, with the January transfer window looming, Leeds will have to countenance further player sales. England striker Alan Smith is one player widely coveted.

The only piece of good news for the club came from the Football League - where Leeds may well be wallowing in seven months. The league has introduced a rule deducting 10 points from any of its clubs should they go into administration. The rule, however, does not come into effect until May 9th, 2004, the last day of this season, and is not legally binding on Premiership clubs until they are relegated.

"If Leeds were to enter administration now they would not face the 10-point penalty sanction," said a league spokesman.

"However, if they are relegated and then go into administration as a member of the Football League they will be subject to the same rules as everybody else."

Assuming Leeds regard relegation as probable, tactically it would be astute of the club to seek administration before the drop comes. In financial circles it was also suggested that Leeds's announcement might be a tactic to force creditors to back off, thereby giving new chief executive Trevor Birch more time to find a buyer for the club.

Until yesterday Leeds had been expected to receive a £4.4 million injection from their deputy chairman, Allan Leighton, head of the British Royal Mail, and a mysterious investor who hides his identity behind ARM Holdings.

There are no doubts about Leighton's commitment to stump up £2.2 million, but questions were being asked about the ability of the anonymous investor - believed to be Sheikh Abdul bin Mubarak al-Khalifa of Bahrain - to provide his share of the money.

The club had needed to reach an agreement with the new investors and its creditors by yesterday to comply with City rules which require it to hold an annual meeting by the end of the year. To do so, details of any agreed fund-raising needed to be sent out a month in advance.

In a statement to the Stock Exchange, the Leeds directors said that if all the negotiations under way were completed successfully, "they will provide adequate funding for at least three months in which to conclude arrangements designed to achieve a more permanent financing of the group.

"But if the negotiations . . . are unsuccessful, the directors may be forced to seek the protection of an administration order." Leeds shares subsided 30 per cent to 2.5p.

Dr Bill Gerard, of the Leeds Business School, has long been predicting the threat of administration for Leeds. "Basically, the announcement today is saying we have not made the progress we had expected, so all bets are off. To turn Leeds United round and get the club back where it should be, you are talking about £100 million-plus.

"Anybody who saw the performance on Saturday (a 2-0 home defeat to Bolton) knows the chickens are all coming home to roost. The heart and soul of the team has been pulled out and it is no surprise the team is struggling. That is making everything so much worse in terms of the debt, because everybody knows if Leeds are relegated there is no way they will avoid going into administration.

"That's making everyone, fans and investors, nervous. But this should have all been put to rights in May when Leeds managed to keep themselves in the Premier League. That was the time to restructure the debt.

"I lay the blame, not only with (former chairman) Peter Ridsdale, but also with the chairmanship of John McKenzie who is highly questionable. The last six or seven months have been lost months when Leeds needed to make progress with the restructuring."

Gerard, though, believes the club will continue to survive. "We have to make it clear it is Leeds United plc, the holding company that owns Leeds United Football Club, that is in a financial mess.

"My belief, and it's a very strong belief, is that there will always be a Leeds United Football Club, but I do not believe Leeds United plc will survive for very much longer.

"We will then see Leeds United Football Club put up for sale by an administrator and hopefully the next set of owners are able to show a degree of financial astuteness and an understanding of football far superior to the owners in the last few years."