English FA Premiership: Leeds United were yesterday saved from financial oblivion after a consortium of local businessmen took control of the club.

The consortium is believed to have targeted the former Leeds player Gordon Strachan, who is currently on holiday in Florida after leaving Southampton last month, as manager. They have also promised to slash the club's wage bill, which is running at £39 million a year.

After almost two months of negotiations the new six-man Leeds board, which includes the former Leeds winger Peter Lorimer and the son of the former Bradford City chairman Geoffrey Richmond, took control yesterday after the plc parent company was placed in the hands of the administrators Ernst & Young, leaving Leeds shareholders with nothing.

Gerald Krasner, the insolvency expert who has been leading the negotiations and will become the new chairman, said last night: "The deal is done, the club is saved."

The consortium will pay £20 million to creditors to settle debts of more than £80 million from a total £105 million and put up an initial cash injection of around £5 million.

Under the deal the consortium, named Adulant Force Limited, will take control of the football club as well as Elland Road and the Thorp Arch training ground while avoiding administration.

Leeds fans had expressed misgivings about the takeover, fearing that Elland Road, valuable land surrounding the stadium and Thorp Arch, as well as star players such as Alan Smith, could all be sold off by the consortium.

Krasner said: "We want to be solely judged by our actions. There has been rumour and counter-rumour regarding the future of both Elland Road and Thorp Arch and, once again, we can categorically reassure fans that Leeds United will not be moving from Elland Road."

But the former executives who backed ambitious spending plans to try to catapult Leeds into the upper echelons of the European game will face a nervous six months after a second independent administrator was appointed to examine their role in the club's demise.

The former chairman Peter Ridsdale, now at Barnsley, his former deputy Allan Leighton and his successor Professor John MacKenzie will all come under scrutiny. Brendan Guilfoyle of the P&A Partnership will investigate the role of all the club's directors over the past three years and report back to the Department of Trade and Industry in six months. The DTI then has the power to decide if they should be disqualified as directors.

The club can now concentrate on battling to avoid relegation to the First Division. They lie bottom of the Premiership with 10 games to play.

The chief executive, Trevor Birch, and the caretaker manager, Eddie Gray, are likely to remain at the club until the summer. Krasner said Gray was contracted until the end of the season and enjoyed the board's "full support". Gray is, however, believed to be resigned to losing his job in the summer to Strachan, who has been soaking up foreign football tactics since leaving Southampton and is understood to have postponed a hip operation.

Birch will not be short of job offers, with Aston Villa heading the queue.

Even if Leeds remain in the Premier League, fans can expect to see Mark Viduka, their highest earner on £65,000 per week, Paul Robinson and potentially Alan Smith leave in the close season.

"We have to cut costs," stated Richmond. We have 60 professionals at Leeds - that's first-year professionals right up to internationals - and 15 of those are on £1 million or more. It's unsustainable."

Garry Wilson, a partner at Ernst & Young, said the deal was "great news for Leeds United, its employees, supporters and creditors".

Under the terms of the deal, holders of the club's £60 million bond, including the Prudential-owned M&G, MetLife and Teachers, will walk away with around 20p in the pound.

Registered European Football Finance Ltd, which loaned the club the money to buy players including Mark Viduka and Seth Johnson, and its German insurance underwriter Gerling have also settled their debts. The club still owes around £7 million to the Inland Revenue and at least £15 million to other creditors.

But the players bought under the scheme, plus the future season-ticket sales pledged to pay off debt, will now revert back to the club, making it a more viable proposition. The club still has to pay back the wage deferral the players and the former managers Peter Reid and David O'Leary agreed to in January, and Richmond said cutting the wage bill was an urgent priority.

In short, the Leeds debts now stand at a more manageable figure of just over £20 million.

"When we got into this deal the debt was over £100 million," said |Krasner. "As a result of the transaction we have done the club is solvent again. We've sorted out all the debt problems. Let's now go forward and get the club back on the football pages."

Guardian Service