SUNDERLAND fans were last night warned of the prospect of more pain ahead after the club revealed a record debt of £36m.

It also incurred losses of almost £21m in the financial year to July 31, following relegation from the Premiership, with a record low of only 19 points and four wins.

A mass clear-out of players in the close season - 24 have gone, including big earners such as Kevin Phillips and Thomas Sorrensen - has halved its £34m wage bill.

The club hopes to restructure its debt as it adjusts to life in the Nationwide League, where TV money is a fraction of that lavished on teams in the Premiership.

Cost-cutting has already led to the loss of 70 non-playing jobs and players and officials agreed to defer part of their pay for 12 months.

Experts said an immediate return to the Premiership was still imperative if further cuts were not to be made.

In a statement to shareholders, chairman Bryan Sanderson said: "We have taken great strides to stabilise the business. We believe we have the financial support, playing management and at the very least the nucleus of the squad needed to return quickly to Premiership football."

Sunderland's slump saw the sacking of Peter Reid, manager since 1995, and then the dismissal a few months later of his replacement, Howard Wilkinson.

Relegation was inevitable when former Republic of Ireland boss Mick McCarthy took over in March, although currently the club is fifth and only five points behind leaders Wigan.

Mr Sanderson said of last season: "The management of the team and of the acquisitions in the transfer market was unacceptable and has cost your company dearly.

"A large part of the £18m squad purchases to try and save our Premiership status added little or no value."

Football finance expert Vinay Bedi, director of Newcastle stockbroker Wise Speke, said: "Full-year results from Sunderland provide a clear illustration to Premiership clubs of what can happen to profits and debt if they fall through the relegation trapdoor.

"The desperate attempts to strengthen the playing squad while trying to avoid relegation contrast starkly with the attempts to reduce the playing squad and wages in particular, as relegation became a reality.

"The result is big increases in debt, an initial sharp rise in wages, large pre-tax losses and the clear need to deliver promotion back to the Premiership or face another harsh round of cost-cutting next summer."