Champions League cash enabled Celtic to cut their £30 million debts by almost two-thirds within six months, the club have announced.

But yet another European exit before Christmas this season means the amount owed is likely to rise by millions once again in the next few months, chairman Brian Quinn has admitted. As a result, the club have decided to give priority to rewarding the current stars instead of allowing manager Martin O'Neill to spend big in the transfer market.

The club's plc yesterday released its interim results for the second half of 2001 to the Stock Exchange. Turnover increased by 59 per cent to £36.3 million and an operating profit of £6.86 million was recorded.

Quinn maintained that reaching the group stages of the Champions League for the first time was the significant single factor in the debt reduction.

He said: "Revenue generated from our run in Europe has assisted in reducing our debt from £29.6 million at June 30th, 2001, to £11.5 million as at December 31st, 2001.

"However, as a result of significant instalment payments in respect of player acquisitions and reduced trading activity we do not believe this position will be maintained for the rest of the year."

The plc board already stands accused in some quarters of not giving O'Neill the financial backing to tempt more top players to Parkhead. But Quinn insists rewarding the current squad with bonuses for continued success is a more sound policy.

He said: "The consistently high standard achieved by the team demonstrates the improvement in quality of the football squad and the inspired leadership of Martin O'Neill and his coaching team.

"The squad has been strengthened by an additional net investment of £7.2 million in players.

"More important but less publicised, we have pursued a policy of giving priority in the use of financial resources to remunerating players."

Now the focus is on developing a youth academy.