Wednesday sees off administration threat - for now

The Owls and the Co-operative Bank spent all day desperately seeking a solution to an unpaid tax bill of 1.1m which will see the club back in the High Court tomorrow following an adjournment in proceedings last month.

And late in the day, the bank agreed to fund a payment of 780,000 to HM Revenue and Customs (HMRC) - the amount sought under the winding-up petition - to buy more time to find a longer term answer to crippling debts which now total around 30m.

The club expects the petition to be struck out at Wednesday's hearing, with the agreement of HMRC.

But although it has avoided the threat of imminent administration, without fresh investment the club is likely to find itself in a similar situation in the near future.

The Owls cannot meet current outgoings and one month's tax bill of around 300,000 is already overdue.

The Co-operative Bank is owed around 25m and has been reluctant to commit further funding to the League One club. The bank is pressing the club to secure a takeover rather than extend its debts still further.

It is understood one investment group, believed to be from the US, is currently undergoing a due diligence process and has an 'exclusivity' deal with the Owls which runs until later in the month. But it is not known if the would-be investors have provided sufficient proof of funding.

David Blunkett, MP for Sheffield Brightside and Hillsborough, said: "A great deal of movement has been achieved over the last 24 hours, involving an enormous amount of hard work by (Wednesday) chairman Howard Wilkinson, chief executive Nick Parker and key personnel in the Co-operative Bank.

"I have been supporting and facilitating discussions between them – including liaising directly with HM Revenue & Customs, who have been very patient in these difficult circumstances.

"I am hopeful that it will be possible to find a way forward which not further deteriorate the standing and financial position of the club, but which will provide us with a breathing space to continue the rigorous financial appraisal which Howard and Nick have been undertaking. I hope that it will also secure the investment which the fans have been patiently waiting for."