Football League bosses may decide to close a loophole which could allow Leeds to escape a mandatory ten-point penalty for going into administration.

As Nationwide League rules stand a club who enter administration while in the Barclaycard Premiership and are subsequently relegated in that same season could avoid the points deduction.

With managerless Leeds propping up the table and the drop to the First Division looming large, only a cynic would suggest they might go into administration before the end of the season to avoid the threat of any sanction.

But yesterday's revelation that they will go into administration unless further planned discussions with their creditors prove successful has heightened the scepticism around Elland Road.

A league spokesman had news for anyone hoping Leeds could avoid losing points next season - should they be relegated - by giving in to their £78m debts over the next few months.

''It (the points penalty) is under consideration regarding clubs that go into administration in the Premier League and are then relegated,'' said the spokesman.

The Premier League have their own rules to deal with administration and insolvency, under which the deduction of points is not yet an agreed penalty.

Leeds' problems stem from the fact they have been unable to re-structure their debts with their two major creditors.

They owe almost £60m to American investors, a figure mortgaged for a 25-year period back in 2001 against future season and match-day ticket sales.

Leeds also owe a further £21m to a Guernsey-based finance company who helped fund a number of player purchases such as Mark Viduka and Dominic Matteo during the club's Champions League heyday.

But under current Stock Exchange rules, an agreement was required in time to be posted out to shareholders a month ahead of the club's annual general meeting which has to be held by the end of the year.

Leeds remain in negotiations with their creditors and hope a deal can be struck - but they have warned of the consequences if that fails to materialise.

A club statement read: ''The directors are continuing to take steps to manage cash flows, including the implementation of the cost savings and management of working capital.

''The directors remain of the view that if all of these negotiations are concluded successfully they will provide adequate funding for at least three months in which to conclude arrangements designed to achieve a more permanent re-financing of the group.

''But if the negotiations referred to are unsuccessful the directors may be forced to seek the protection of an administration order.''

Leeds have been forced to put on hold plans to accept a £4.4m cash injection from deputy plc chairman Allan Leighton and a company by the name of ARM Holdings Group Ltd - understood to be run by Sheikh Abdul din Mubarak Al-Khalifa, a Leeds fan and oil-rich member of Bahrain's ruling dynasty.

While the statement confirms Leighton's funds ''remain available for investment in the group'', there is no mention of the Sheikh's money.

But with Leeds on the brink of administration, the Sheikh - or any other investor such as long-time Whites fan and internet multi-millionaire Peter Wilkinson - would be wise to hold on to their money for now and buy the club at a fraction of the price in a few months' time.

Dr Bill Gerard, a professor of sport management and finance at Leeds University Business School, is hoping the Sheikh comes forward.

He said: ''If somebody is prepared to put their money where their mouth is and help Leeds then he would be loved, just as Chelsea fans love (Roman) Abramovich.

''We would love our Sheikh if he exists. But I suppose he is thinking 'Why invest now because Leeds will be a better buy if they go into administration?'''

Leeds' hopes of attracting a new manager to Elland Road following the recent sacking of Peter Reid can now be ditched, because it is patently obvious the club cannot afford the likes of Southampton's Gordon Strachan or anyone of a similar standing.

That is no surprise - bearing in mind Leeds are already paying close to £7m in severance payments to former bosses David O'Leary, Terry Venables and Reid.

Eddie Gray, currently in caretaker charge, appears to be the man in situ for the foreseeable future - although he will be wondering just what kind of squad he will have left come the end of the January transfer window.

Despite chairman Professor John McKenzie's assertion that striker Alan Smith will not be sold, the future of a player worth at least £5m must now be in question.

Of greater concern to Leeds fans will be the future of the club as a whole, but Gerard believes the club will continue to survive.

He said: ''My belief is that there will always be a Leeds United Football Club. But I do not believe Leeds United plc will survive for very much longer.

''We will then see Leeds United Football Club put up for sale by an administrator and, I hope, the next set of owners are able to show a degree of financial astuteness and an understanding of football far superior to the owners in the last few years.''