Chairman Professor John McKenzie tonight confirmed “I am pleased to announce, on behalf of Leeds United plc, that we have now agreed the first stage of a financial restructuring programme”.

Leeds have reached 'a standstill agreement' with their creditors and now have until January 19 to seek a potential buyer for the club or significant investor ready to dig them out of the financial mire, however, administration still remains a possibility.

Leeds last week announced their administration fears to the Stock Exchange after a planned cash injection from a company known as A.R.M Holdings Ltd, albeit fronted by Sheikh Abdulrahman bin Mubarak Al-Khalifa, failed to materialise.

The exact same sum from deputy plc chairman Allan Leighton was still available, but not enough to bail out Leeds after recently announcing a British club record loss of £49.5m (€70m) and debts of £78m (€110m).

It meant that avoiding administration hinged on discussions which had been ongoing since August, talks initially brokered by McKenzie, and then followed up by chief executive Tevor Birch in the wake of his appointment last month.

Birch finally reached an agreement this week with American institutions Met Life and Teachers, and British firm M&G, the three companies who agreed to a £60m (€85m) bond in 2001, secured against future season and match-day ticket sales.

The first two repayments have been made with the debt having hung like a millstone around the club’s neck.

Birch has also thrashed out terms with a company representing Registered European Football Finance Ltd, a Guernsey-based agency to whom Leeds owe a further £21m (€30m) with regard to the purchase of several players including Mark Viduka.

The statement read: “Leeds United plc announce that it today has signed a formal standstill agreement with its principal finance creditors for the period until January 19 2004 to provide the group with sufficient working capital until that date to allow it time to seek to identify parties who would be prepared to make a substantial investment in, or offer for, the business as part of an overall financial and balance sheet restructuring.

“The standstill is the culmination of negotiations between Leeds United and, among others, the providers of £60m of senior secured notes (the noteholders) and Gerling General Insurance Co, the credit insurer of Registered European Football Finance Ltd who is the provider of Leeds United’s football player finance lease arrangements.

“In summary, the key points of the Standstill are as follows:

“The noteholders have agreed to allow £4.1million of accumulated cash, which is currently held for them as part of their security to be used to fund certain working capital requirements of the group.

“REFF and Gerling have agreed to defer approximately £1.7million of capital and certain interest repayments due in the period to January 19, 2004.

“HSBC, the group’s banker, has agreed to provide a new term loan facility.

“The board will seek to identify parties who would be prepared to make a substantial investment in, or offer for, the business, working in conjunction with the group’s restructuring advisors.

“However, the directors believe that these discussions, if they lead to an offer, may not realise value for the equity at the current share price.

“In addition, there can be no guarantee that this process will be concluded satisfactorily and, if unsuccessful the directors may be forced to seek the protection of an administration order.”