CITY watchdog the Financial Services Authority (FSA) last night denied it was investigating roller-coaster trading in Newcastle United shares.

Shares in Newcastle United fell by as much as 6p to 27p last Tuesday, wiping more than £8.5m off the value of the club, forcing it to issue a statement to the Stock Exchange denying the rumour that manager Sir Bobby Robson had resigned.

Newspaper reports suggested the FSA, which regulates the UK's stock exchange, had launched an investigation into a series of slumps and surges in the trading.

But The Northern Echo can reveal that no such probe will take place.

The FSA confirmed that the club was not under investigation, but refused to make any further comment.

The organisation said it did not comment on individual shares.

The rumours came at a difficult time for Newcastle United, which like other football clubs has lost favour with would-be investors.

The market value of the club, which once stood at almost £200m, is now about £33m.

Before the start of the season, the club's value had been on the rise on the back of impressive pre-tax profits of £11.5m for the six months to January.

Andrew Miller, director at stock brokers Gerrard, in Newcastle, said: "Rumours of this nature are bound to have an effect on the share price of the club.

"Newcastle's shares fell by around 15 per cent as a result of the rumours, which I believe where circulating on websites, and only recovered once the club issued a statement denying the claims."

He said: "As a stock market listed club, Newcastle would have to make an announcement to the Stock Exchange first about any movements regarding their manager.

"There is no suggestion of wrongdoing by the club, or that it failed in its legal duty to keep investors informed."