In exchange for a £10m (€14.3m) stake, it is believed Bates was looking to acquire a 51% holding in Leeds, along with the chairmanship, a role Sainsbury has earmarked for himself.

However, sources close to Sainsbury suggest there are willing investors waiting in the wings for his £25million takeover to be completed, including prominent businessmen both in Yorkshire and London.

Sainsbury was today involved in negotiations aimed at finalising the details with regard to the necessary funds required to mount a successful bid for the Coca-Cola Championship club.

Sainsbury told the Press Association: “I can confirm a meeting took place last Thursday with Ken Bates during which a potential investment was discussed.

“Nothing has been agreed. This meeting is among a series with people who are interested in coming on board once a takeover has been completed.”

However Bates, who earlier this season failed in an attempt to plough the £10m (€14.3m) he has burning a hole in his pocket into Sheffield Wednesday, was equally as vehement in his denial.

“It’s absolute rubbish. I know nothing about it,” said Bates from his new base in Monaco.

“I have been linked with so many clubs and if they were all true it would take it up to 38. I cannot help what these people say.”

But the great-grandson of the supermarket founder would appear to be the only card left on the table for the current board to deal with as the investment group led by Leeds-based property developer Norman Stubbs is understood to be short of cash.

There are suggestions in some quarters if Sainsbury fails to complete his deal then the Whites will be in administration before the end of the season.

That would incur with it the Football League penalty of a 10-point deduction and lead to a subsequent relegation battle, however chairman Gerald Krasner today refused to comment on such a possibility.

An MRI scan, meanwhile, has confirmed Leeds’ worst fears surrounding Nathan Blake and the striker will be out of action for at least two months with a ruptured hamstring.

Blake only recently joined Leeds on loan from Leicester, but was stretchered off with the injury early in Saturday’s 3-0 FA Cup third-round defeat at Birmingham.

Boss Kevin Blackwell is again looking for another forward, with Brian Deane still out for a further month with a shoulder injury.

Leeds’ financial problems, though, will prove a hindrance, with Blackwell needing to move a player out before he can bring another in.