Newcastle could be forced into administration

Newcastle owner Mike Ashley could be forced to put the club into administration if former boss Kevin Keegan wins a massive compensation pay-out.

Some at the club fear Keegan could be awarded far in excess of the £9million which has been reported if he successfully argues his case.

That would have major financial implications for the cash-strapped club, with administration the most stark of a range of options.

Keegan's claim for constructive dismissal, which is being heard by a Premier League independent arbitration panel, is expected to reach a conclusion tomorrow.

Should Ashley choose administration, the Magpies would lose 10 Coca-Cola Championship points, a penalty which would undermine their efforts to drag themselves back into the Premier League at the first attempt.

It is just over a year since Keegan left St James' Park for the second time as manager amid a furious bust-up over the club's transfer policy.

His departure came following the deadline day arrivals of striker Xisco and loan signing Ignacio Gonzalez, both allegedly without his knowledge.

His case is understood to rest on his claims that his position had become untenable, while Newcastle's defence is that he was fully aware of the way the recruitment set-up would work under Dennis Wise, then executive director (football), and that he walked out on his contract.

The two parties met in an attempt to find a solution days later, but were unable to do so, and arbitration talks since have also proved unsuccessful.

After Keegan left, Chris Hughton, Joe Kinnear, Hughton again and Alan Shearer had spells as manager, but none of them were able to prevent relegation at the end of last season.

Ashley held talks with Shearer in the immediate aftermath of the drop to discuss the way forward, but then decided instead to put the club on the market for the second time.

But almost four months on and despite lengthy negotiations with a series of potential buyers, none has yet finalised a £100million deal to end the sportswear magnate's ill-fated tenure.

Indeed, the spectre of the Keegan situation may well have been a factor in that with prospective owners unwilling to pick up the tab should he win his case.

The playing staff has been greatly by a summer exodus which has seen a wage bill of £74million reduced by around half, and as the club awaits developments on the Keegan front, only two loan signings - Danny Simpson and Zurab Khizanishvili - have arrived to plug the gap.

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