The owner of Southampton Football Club fell into administration today after failing to strike a deal with its banks over its £24 million debt pile.

Southampton Leisure Holdings confirmed it had appointed Mark Fry and David Hudson, partners of Begbies Traynor, the accountancy firm, as administrators of the business.

Rupert Lowe, the executive chairman of Southampton Football Club’s debt-laden parent company resigned today, alongside directors Andrew Cowen and Michael Wilde.

The company said: "Southampton Football Club Limited, a subsidiary of the Company, is unaffected by these insolvency proceedings."

The club said in a statement that Mr Lowe, a former Deutsche Bank banker and a well-known figure in the City, has quit along with all his fellow board members, with the exception of David Jones, Southampton Leisure's finance director.

The Times revealed this week that the company had failed to agree an extension of its overdraft with Barclays Bank and that Begbies Traynor was standing by to step in as administrator of the club, which has struggled since it was relegated from the Premier League in 2005.

Mr Lowe, who is the chairman of WH Ireland, the stockbroker, had a well-publicised falling-out with Mr Wilde, the Southampton chairman and a construction millionaire. Mr Lowe’s return to the club last May has failed to arrest its decline and some supporters have called for his departure.

It is thought that the administrators and Barclays, with which the club had exceeded its £4 million overdraft limit, believe that it will be easier to find a buyer for Southampton with the board gone.

People close to the situation also said that that Norwich Union, owed £24 million by Southampton for its 30,000-seat stadium built in 2001, might consider writing off some of the club’s debt mountain to help to keep it alive. Aviva, which owns Norwich Union, declined to comment.

It is understood Norwich Union will make its decision after the administrators identify possible buyers for the club. A buyer must be found before the summer or the club itself may need to be put into administration.

“It’s now about keeping Southampton Football Club alive,” Mr Lowe said yesterday. “This is the only way it could have been done. If we can stay in the Championship, this club has a good chance of finding new investment. We have young players who are committed and will flourish in the future.”

Southampton is in the bottom three of the Coca-Cola Championship and faces relegation.

Hopes that the club could escape a ten-point penalty by putting its parent company into administration could be derailed by the Football League. The matter will be discussed by the League board at a scheduled meeting on Tuesday, and Begbies Traynor and DLA Piper, its legal adviser, are already in discussions with the League about the issue

The League will want to consider whether the effect of the holding company going into administration is tantamount to the football club doing the same thing. If it believes that it is, then it could try to impose a sporting sanction.

However, Southampton would almost certainly mount a challenge, because the League rules state that only a club entering administration is deducted points. This does not apply to holding companies.

Some observers believe that Southampton seeks to exploit a loophole in League rules, but it is a grey area. The rules are designed to avoid a situation in which a club is run properly but could be penalised for its holding company having problems elsewhere in business and entering administration.

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