Palios and Thompson under fire as crisis leaves FA in total disarray

The Football Association was in complete disarray last night as two senior sources within the organisation insisted that its chief executive, Mark Palios, was not "in the clear" as to whether he attempted to mislead the organisation over his or Sven Goran Eriksson's affair with an FA secretary.

The Football Association was in complete disarray last night as two senior sources within the organisation insisted that its chief executive, Mark Palios, was not "in the clear" as to whether he attempted to mislead the organisation over his or Sven Goran Eriksson's affair with an FA secretary.

Palios had appeared to be completely exonerated by a statement issued by the FA chairman, Geoff Thompson, on Tuesday, but this was rejected by both sources, who both also suggested that Thompson's position was called into question because of his handling of the crisis that is now threatening to engulf the FA.

Thompson's statement, which appeared to put Eriksson's future in the balance, came amid growing unease within the FA over the way the organisation had first denied that Eriksson had had an affair with Faria Alam - and indeed threatened legal action - but was later forced to retract the denial and admit the affair had taken place.

Thompson also announced that he had instigated an inquiry into the débâcle, the findings of which will be presented to an extraordinary meeting of the FA board a week today.

However, the senior sources are furious with their chairman. "Mr Thompson is not in a position to condone or exonerate anyone," one said. He insisted the 12-strong board would examine all the facts and would not shirk from taking the "necessary action". If that meant sacking Eriksson from his £4m-a-year post, he said, then that would be done.

The other source, a member of the board, went on to question whether Thompson was "strong enough to see this through" and claimed that he doubted the chairman was capable of dealing with the fall-out of dispensing with the coach or the chief executive.

"The only thing that matters is whether anyone has lied to their employer, which we'll discover when we see the evidence," he said. "If that's found to be the case, I can see no course of action but the sack. If you're caught lying, that's the price you expect to pay."

Both sources expressed their surprise at the wording of the chairman's statement. "It was Mr Thompson's personal statement," the first said. "No decision has been taken over anyone involved in this. We have to be very careful because people's employment is involved here."

Even if Palios is eventually cleared there is little sympathy for him. "It wasn't exactly sensible for Palios to go dipping his pen in the office ink," said the second source. "The remit of this inquiry also needs to explore what role the secretary had during Euro 2004, whether she attended, and if so what she did out there and who paid for her to be there."

When questioned last night as to whether Alam was in Portugal, the FA said: "You'll have to ask her that."

There are rumours circulating around the FA's headquarters in Soho Square that a third official in the organisation may have had an affair with Alam, who faces the sack when she returns from holiday next week. If true it will complicate an already complex situation.

"The possibility has been discussed by individuals at the top level of the organisation," one FA insider said. "No one is holding their hand up and we're not expecting that particular bombshell in the next few days, but the way things have been around here recently, you can rule nothing in and nothing out."

The FA board members are insistent that an inquiry is necessary. "This is a matter of great concern and we must get it right. Some people may think it's an incident that has simply added to the gaiety of the nation. But it's very serious," the first source said.

"The incident has made a lot of people on the board very angry. This is not what the FA is or should be about. For three days we've been tangled up in this mess and that's not right."

Contrary to the impression given on Tuesday, the inquiry is not being conducted by Thompson, but by a lawyer from outside the FA - although the organisation yesterday continually refused to reveal his identity.

Matters have been complicated because Thompson is out of the country, in Lithuania, on "Uefa business". He will probably return tomorrow. The first source said he would have preferred the meeting to take place before next Thursday. However one member, Bolton Wanderers' chief executive Phil Gartside, is in China on business while a second, Mike Rawding of the East Riding FA, is ill and may not be able to attend next week.

The fate of Eriksson and Palios will hinge on what conversations took place and whether or not the coach was fully questioned as to his involvement with Alam. FA officials believe that he was spoken to, but Eriksson's camp insist this is not the case. They vehemently insist he will be cleared.

Yesterday his aide, Tord Grip, said Eriksson, currently on holiday in Sweden, was not culpable. "It's ridiculous. This has nothing to do with football. Sven's not worried. The FA's not said anything about him losing his job. He says they didn't ask him about what was happening in his private life.

"He said he did not lie because nobody talked to him about this. If we had lost in World Cup qualifying, then I could understand it. But this is absolutely useless. In Sweden we don't discuss our private life, we have other things to discuss."

But, as one source pointed out, "the sexual aspect of this totally irrelevant". What matters, he said, was whether or not the truth had been told before legal proceedings were threatened. Despite the messiness of the affair, the question is a simple one. Again Eriksson's camp insist he did not mislead anyone and that this will clearly be shown in the independent report.