Owls explore all options in bid to avoid administration

But with the clock now ticking towards another High Court date with destiny, the Owls' hopes of survival are essentially out of the club's hands.

The Co-operative Bank, which is owed in excess of 20m by the League One club, is effectively in charge as it oversees negotiations with potential investors and ratifies all major outgoings.

Owls chief executive Nick Parker has confirmed the bank has approved payments to staff and players and to creditors – other than HM Revenue and Customs (HMRC), which has prompted the taxman to issue a second winding-up petition.

Wednesday have until the court date of November 17 to either deliver a takeover or persuade the bank to loan more money to again side-step administration.

Three weeks ago, the bank agreed an emergency injection of 780,000 to settle outstanding PAYE debts and allow an initial winding-up petition to be dismissed.

But Wednesday have continued to default on PAYE payments with HMRC now demanding a further 600,000.

The position is likely to worsen next month when a VAT bill of around 180,000 is due.

A Norwegian oilfield company, whose takeover approach is being fronted by former Owls manager Chris Turner, is offering to loan 600,000 to see off the immediate threat from the taxman.

Wednesday have welcomed the offer but last night it remained unclear if the would-be investors had provided proof of funds or whether the 600,000 would be shaved off the proposed takeover offer as a consequence.

The club yesterday warned that administration was not an easy way out of an apparently intractable situation and insisted the threat of financial collapse was not imminent

In a statement, the club said it "is not about to be wound up, nor is it about to enter into administration."

It added: "The Co-operative bank authorises all payments going out of the club and have on this occasion declined to ratify the HMRC payment.

"Howard Wilkinson and Nick Parker continue to work tirelessly to seek a positive conclusion to the financial issues at the club.

"Ongoing talks with a lead investment party and others remain extremely positive. One investment group has pledged to pay HMRC 600,000 as a token of its commitment to concluding a deal at the club and we continue to monitor that situation.

"Administration is not the answer to the club's problems. The cash required to obtain control of the club at this moment would be no greater and probably less than if the club was in administration – not to mention the loss of goodwill across the board; the massive costs involved; the large write-off that would be suffered by the bank; and the mandatory 10-point deduction imposed immediately by the Football League."

The club believes the start of season ticket sales in December, potential for increased income from an improved performance on the pitch and the option of a player sale in the January transfer window may yet persuade the bank to provide more emergency funding if investment fails.

A spokesman confirmed Wednesday had received legal advice which said the club was not trading while insolvent on the basis that it was in advanced talks to secure a takeover.

Although the club does not want administration, the Co-operative Bank may be weighing up whether it does offer them a way out even though, as by far the biggest creditor, it would initially appear to have most to lose.

Substantial funds could be raised through the potential sale of Hillsborough as a means of engineering new ownership and an exit from administration.

The bank's role as the major creditor would enable it to control any proposal to exit administration with speculation that sale of the ground could raise in the region of 10m. But the move would leave Wednesday footing the bill to lease the ground back.

The Co-operative declined to answer any questions last night.

Instead, the bank issued a statement which stated: "Throughout Sheffield Wednesday's recent financial difficulties, The Co-operative Bank has worked extensively with the club's representatives and all other parties with the aim of securing its future financial stability. This level of support has been acknowledged by members of the club's board on a number of occasions.

"The club continues to be run by its board but the Bank has laid down strict parameters in terms of the extent of bank borrowing support."