Villa's £9m loss clouds O'Neill plan

Martin O'Neill's attempts to build on his inheritance from David O'Leary at Aston Villa - which have seen him target Celtic's Stilian Petrov in the midst of a bidding war for Doug Ellis' controlling stake in the club - will continue against a backdrop of a £9m loss during the last tax year.

As O'Neill prepared for last night's friendly at the Dutch side NEC Nijmegen and weighed up a move for Petrov, the Bulgaria midfielder, figures were announced showing that Villa lost £8.89m in the 12 months to 31 May, compared with a loss of £1.77m a year earlier.

Revenue dropped from £51.6m to £49m, Villa's Premiership attendances falling by 8.7 per cent. Ellis, the 82-year-old chairman and butt of supporters' protests, admitted: "It would be foolish to suggest that the 2005-06 year was anything but a huge disappointment."

In a statement to the Stock Exchange, Ellis confirmed that "extensive discussions" were ongoing to determine whether any of the four consortia seeking to buy Villa would make a formal offer for the club's issued share capital. The American billionaire Randy Lerner, the owner of the Cleveland Browns American football team, is the current favourite.

O'Neill, who has acknowledged that the Villa squad needs to be strengthened, has been assured that funds are available whether or not a takeover is completed. Petrov, who served him at Celtic, is valued at £7m but Villa are unlikely to offer more than £5m.

Meanwhile, the previously unsettled Swedish centre-back Olof Mellberg has confirmed his readiness to stay on at Villa Park under O'Neill.