TWO Icelandic entrepreneurs will buy a major stake in Newcastle United less than two months after Mike Ashley took control of the club, it is rumoured.

Businessmen Palmi Haraldsson and Jon Asgeir Johannesson are said to be considering making an offer for the Premiership club and have had several meetings with billionaire Mr Ashley, who completed his £133m take-over in June.

Last night, Newcastle United remained tight-lipped. But sources close to the tycoons in Iceland said that discussions to buy a major stake in the club are at an advanced stage, although no agreement has been reached.

Yesterday, Mr Haraldsson refused to comment on the rumours but said: "Newcastle is a great club, with a great manager and I have been a Newcastle supporter for a very long time."

Sportswear magnate Mr Ashley - who owns the Sports International empire, which includes brands such as Lonsdale and Kangol - became the club's outright owner eight weeks ago.

He de-listed the club from the London Stock Exchange after buying the club's stock for 101p a share.

Newly-appointed club chairman Chris Mort has repeatedly insisted that Mr Ashley has made a long-term commitment and had not bought out previous major stakeholders Sir John Hall and Freddie Shepherd to make a quick profit.

He recently paid of £30m of the club's £81m debt in a move that some analysts said was an attempt to make Newcastle more attractive to investors.

The club said it was part of Mr Ashley's long-term goal of making Newcastle the "biggest and best" club in England.

Mr Haraldsson and Mr Johannesson are heads of the Baugur Group, an Iceland-based investment group specialising in the retail, real estate and service sectors across northern Europe.

Among leading brands the group has stakes in are Newcastle-based Goldsmiths jewellers, House of Fraser, Woolworths, and women's clothing stores Karen Millen and Oasis.

There is also speculation that they are planning to acquire the British Home Stores chain from billionaire Sir Philip Green.