Bates claims Gullit will not be hurt by Harding row

On his first day as the new Chelsea player-manager, Ruud Gullit experienced some of the problems which made it easy for his predecessor to depart, when Ken Bates decided to tear up the agreement that would have seen Matthew Harding eventually take over from him as chairman.

With Glenn Hoddle, a close ally of Harding, having moved on to coach England, Bates has sought to reassert his authority at Stamford Bridge. Harding remains a director but by terminating the deal thrashed out in March and designed to put a stop to the boardroom rancour which saw Harding banned from the directors box, Chelsea have turned away the pounds 10m he had agreed to provide for new players.

However Bates says Gullit will not be compromised in the transfer market. "We have already made arrangements elsewhere to ensure the manager is not disadvantaged in his player negotiations,'' Bates said. "He is already looking at a couple of Continental players which will not be affected by the change in arrangements.''

They are the Juventus goal-scorer Gianluca Vialli and Bayern Munich's Jurgen Klinsmann and it was Harding's visit to Germany last week to talk with Klinsmann which further fuelled Bates's anger towards his rival. Part of the agreement, which had remained unsigned, was for Harding to become vice-chairman and also head a committee dealing in the club's playing affairs. Bates said it was incompatible with that responsibility to be discussing transfers without the knowledge of other board members.

Gullit remained nonplussed by the latest twist in the power struggle. Helping to launch BBC TV's summer sports schedule he said: "I don't know what the reason is for what has happened and I don't care. I have my budgets so I know what to spend and all I'm interested in is that the thing be resolved as quickly as possible.''

A statement issued by Chelsea Village, which owns the club and leases Stamford Bridge, said: ''The negotiations have reached a stalemate where the requirements of neither side could be satisfied. The further investments and assistance by Mr Harding which would have flowed from that agreement will not proceed.''

Harding will now convert pounds 5m of unsecured loan stock to give him 14,285,714 ordinary shares. He also has the right to lift his holding to 25.1 per cent yet the multi-millionaire's dream to become chairman is doomed, at least during the lifespan of the present regime.

Returning from a business trip to San Francisco last week, Bates was dismayed to learn of new Harding demands and called a halt to the protracted negotiations. "It has dragged on long enough and there is no going back, the matter is over,'' he said. "The goalposts kept moving and it was time to put up or shut up.

"I've always said that I saw Matthew as my natural successor and I have lots of regrets that it has ended in this way. But life has to go on. You can't keep hanging around for the train if it is not going to leave the station. You have to get another train.''