Vodafone, the world's largest mobile phone group, has ended its £36 million shirt sponsorship deal with Manchester United two years early in a shock move which could put further pressure on the Old Trafford club's new American owners.

Instead, Vodafone is to enter into a deal associating the brand with the Uefa Champions' League - the biggest club competition in football - "in order to pursue its global marketing objectives", according to a spokesperson.

Malcolm Glazer, the American sports magnate, bought the Old Trafford club for £800 million earlier this year, and took the company private. With the team on the brink of elimination at the group stages of this season's Champions' League after last night's 0-0 draw against Villarreal - at a potential cost to the club in lost revenues of up to £10 million - the Vodafone decision could blow a serious hole in the Glazers' financial planning.

Officials at Manchester United were putting a brave face on events. "The Manchester United shirt is the most iconic in sport," Andy Anson, the club's commercial director, said.

"The club feels that, in the current market. there is a genuine chance to attract significant additional investment.

"Initial soundings and discussions with a number of world-class potential partners have been very encouraging and we are confident of securing a new deal in the coming months."

Mr Anson has already been responsible for attracting German car manufacturer Audi into an important partnership with the club. His priority now will be the search for what will be only the third shirt sponsor in United’s history. Japanese electrical firm Sharp was the first company to its name emblazoned on the famous red strip, with the association lasting 18 years from 1982.

What could turn Mr Anson's job into a hard sell, however, is the club's gradually tarnishing image. Manchester United has not won the European Cup since 1999 and has now gone without an English league title since 2003. Last week, the club's long-term captain, Roy Keane, left the club under acrimonious circumstances.

Chelsea, the winners of the Premiership this year, have the biggest shirt sponsorship deal in England, with a £50-million, five-year agreement with Samsung. Real Madrid has meanwhile signed a £16-million-per-year deal with Taiwanese mobile company BenQ Mobile.

Although Vodafone did let an opt-out clause in the Manchester United deal pass without giving an indication they wished to end it, the company is restructuring its sponsorship strategy. "Manchester United is a world-class club, but the Champions League is a world-class competition, and the new agreement does a little bit more for all our customers around the world," the spokesperson said.

Manchester United fans opposed to the Glazer takeover had urged Vodafone to end its sponsorship at its annual investor meeting in July. At the time Vodafone said it did not see any reason why it should not continue to benefit from Manchester United links.

Glazer has infuriated fans who fear he will milk United’s profits to pay back vast amounts of debt he used to buy the club. A new shirt sponsorship deal is unlikely to prove popular with the parents of Manchester United-supporting children, who will doubtless demand team shirts, with the latest sponsors' logo, for the start of next season.

When Vodafone announced the latest phase of the partnership in December 2003 it said it would roll out a wide range of club content, including results, news, still and video images, ringtones and games, through its 3G services.

In its formal statement to the Stock Exchange today, Vodafone described its deal with the Champions League as "an exciting and exclusive" three-year agreement, from July 2006, which will make the company official mobile network of the competition as well as sponsors.

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