Secret deal gave free house plus pounds 1million to Venables

DETAILS EMERGED last night of a secret multi-million pound deal with the former England coach Terry Venables to bring him to a struggling First Division club.

With Crystal Palace facing financial ruin, it was disclosed that he received a package worth millions to lure him to the club he quit last month as head coach. A leaked letter by the former chief executive Jim McAvoy, also claims the club could not afford Mr Venables' deal. Mr McAvoy says in the letter to other club directors that the contract included:

r A tax-free salary of pounds 750,000 (worth pounds 1.1m);

r A pounds 650,000 house, with Mr Venables retaining the equity interest in the property;

r A pounds 20,000 relocation fee;

r A one-off fee of pounds 135,000 for entering into negotiations with the club chairman, Mark Goldberg;

r Options on 5 per cent of all club shares;

r A 5-per-cent bonus on savings from the pounds 10m transfer budget.

In the letter Mr McAvoy says the nature of the deal had been brokered by Mr Goldberg - a fan of Crystal Palace since his schooldays - because of personal pride. "Early on in the discussion Mark made the astonishing statement that he didn't want anyone to think that he couldn't afford Terry Venables," he says.

Mr McAvoy adds that despite his position with the club, he was kept out of negotiations because he had started to question the contract Mr Goldberg was drawing up for the former England coach. From there onwards he and the rest of the club's directors had to deal with Mr Venables' agent.

Details of the deal come against a backdrop of crisis at the south London club, struggling mid-table in the First Division. Administrators were called in this week to sort out its debts of more than pounds 20m.

It is understood that of the pounds 20m, pounds 5m is owed in outstanding transfer fees.

Mr McAvoy says the Venables deal put Crystal Palace in "an impossible situation". "The aims and objectives of the head coach and chairman were in ... conflict with the needs and obligations of the company."

Mr Venables was recruited to the club as head coach at the end of last season. During his brief tenure he oversaw a series of transfer deals designed to strengthen the squad, whose value for money have been questioned. One player, Craig Moore, bought from Rangers for pounds 800,000, is being paid pounds 13,000 a week, a figure unheard of apart from at a handful of Premiership clubs.

In his letter Mr McAvoy criticises the way new players were brought to the club, and specifically agents' fees. "The manner by which players were being identified, brought to the club on trial and negotiations with agents handled was completely unprofessional and certainly not following the process laid down by the board," he says. "The club spent more than pounds 1m in fees to agents. I have no doubt we were seen as an easy touch, the new boys and naive."

Last night a spokesman for Mr Venables said: "The current problems facing Crystal Palace have nothing to do with Terry Venables." Mr Goldberg said: "I am not interested at all. Jim McAvoy is just causing trouble."

The disclosures last night caused more anguish among fans. Laurie Dahl, editor of the fanzine Palace Echo, said: "Mr Venables is more interested in silver than silverware."

How pounds 20m was lost, page 11