NEXT Thursday, it will be seven years to the day since Leeds United faced Barcelona in the opening match of a Champions League campaign that would eventually take them all the way to the semi-finals.

In the intervening period, Barcelona have won two Spanish titles, two Spanish Super Cups and a Champions League crown. Leeds, on the other hand, have suffered two relegations, two separate points deductions and spent a lengthy period in administration. When it comes to life in West Yorkshire, it's hardly been a case of 'living the dream'.

So what could possibly have transformed a club on the cusp of greatness into a League One outfit needing to beat Hartlepool United today to wipe out the 15-point deficit with which they started the season?

The Leeds United story is effectively a blueprint for how not to run a football club, but three particularly poor decisions emerge as key factors in the Elland Road downfall.

The first came in 1999. Leeds had just finished fourth in the Premiership and chairman Peter Ridsdale wanted to support David O'Leary's recruitment drive.

O'Leary was keen to sign Eirik Bakke, Danny Mills, Michael Duberry and Michael Bridges for a combined sum of £15.25m, but Leeds' accounts did not contain the money needed to do so.

The club's bank, HSBC, were willing to lend the money, but only as part of a short-term deal that would have severely restricted the club's ability to spend more in the future.

So rather than admit defeat, Ridsdale approached Ray Ranson, a former Manchester City footballer who headed the Guernsey-based company, Registered European Football Finance (REFF).

Ranson set up a series of deals where Leeds would buy a player for, say £6m, and REFF would draw up an agreement for a financial institution to lend the club exactly that sum. In return, Leeds would pay back the money, with interest, over the course of the player's contract.

So far, so good, but as extra security, REFF's preferred financial institutions inserted a number of clauses that would come back to haunt Leeds in the future.

For a start, they charged far higher rates of interest than normal banks would and demanded that payments be made every quarter. More significantly, however, they also demanded that, if Leeds were unable to keep up with their repayments, they would be forced to sell the player in question and hand over the proceeds. Most damagingly of all, if the player's value had dropped in the intervening period and his subsequent sale price did not match his purchase value, the institution in question could claim the difference from the club.

Given that such an arrangement was used to fund the purchase of Mills, Duberry, Bridges, Mark Viduka, Olivier Dacourt and Dominic Matteo - none of whom increased in value during their time at Leeds - it is little wonder that the club's expenditure gradually began to get out of hand.

Such escalating costs might have been manageable had the Leeds board been able to offset them against incomings, but a second crucial decision effectively prevented them from doing exactly that.

Worried at a growing imbalance on the balance sheet, Leeds' directors took out a one-off £60m loan with M&G of London and MetLife and Teachers, two American hedge funds.

It was the biggest loan ever made to an English football club and it came with strings attached. Leeds' annual repayments, which were due every September, would come from a special 'locked' account containing all the funds raised from season-ticket sales and corporate hospitality accounts the previous summer.

This money was accounted for from the moment it was paid so, when things started going badly wrong two years later, the Leeds board were unable to get their hands on the one incoming money stream that might have enabled them to repair some of the damage.

Desperately in need of cash to pay their lenders, Leeds' money-men could only look on helplessly as the majority of their income disappeared to London and America every September.

Still, though, the situation might not have been irreversible had things not gone so badly awry on the pitch, and this is where the third bad decision comes into play.

In December 2001, Jonathan Woodgate was convicted of affray and Lee Bowyer was acquitted following an attack on a student outside the Majestyk nightclub in Leeds city centre.

The episode might well have blown over had O'Leary not taken the staggeringly insensitive option of rushing out a book entitled "Leeds United on Trial", causing irreparable damage to O'Leary's relationship with Ridsdale and his players.

Leeds failed to qualify for the Champions League in the following season, O'Leary was unceremoniously dismissed and neither Terry Venables nor Peter Reid were able to prevent relegation to the Championship.

The on-field decline meant reduced attendances, income and meant the value of the Leeds squad plummeted.

Leeds were forced to accept knockdown prices for their only remaining assets. As a result, the banks were once again knocking on their door.