Leicester City, who were relegated from the Premier League last season, have applied to go into administration, with former England striker Gary Lineker heading a potential takeover consortium.

Leicester have endured a miserable few months since being relegated from The Premiership, with spiralling debts threatening the existence of the club.

The club moved into a newly-built stadium at the start of the season, but the cost of the new Walker Stadium has saddled the club with debts the club is currently unable to cover. Further bad news comes with the decision of former employee Dennis Wise to sue the club for unfair dismissal after he was sacked earlier in the season. Last week, the club received a stay of execution when the players agreed to a pay cut to alleviate the financial woes at the Walker Stadium. However, the deal struck with the players came too late to prevent the club sliding into administration.

The deal with the players was intended to buy time to enable the club to restructure their debts, but the club announced to the Stock Exchange that they were going to apply to the High Court to go into administration.

Leicester City Plc chairman Greg Clarke said: “Whilst this is a severe setback for the club it does not mean the end of Leicester City.”

Clarke also confirmed that Lineker, who played at Leicester from 1978-85, was heading a consortium attempting to buy out the club.

The consortium, which comprises football club chairman Martin George, David Ross the chief operating officer of the Carphone Warehouse and Jon Holmes of SFX, will be holding a press conference on Wednesday, where they are expected to announce details of their takeover plan.

“The objective of the consortia will be to buy Leicester City as a going concern from the administrator and to back Micky Adams and the team in their quest for promotion,’ Clarke added.

“Progress on the formation of the consortia and the timelines involved in buying the club out of administration and into private ownership will be reported back as soon as is possible.

“In the meantime I would encourage the people of Leicestershire to get behind both the fundraising activity and to support the team through this difficult time.”

Meanwhile, club manager Micky Adams admitted he was disappointed but not entirely surprised by the news.

‘Once the players had agreed a deferment of their wages we were under the impression that was it – but there was always the feeling that there might be something more to come,’ said Adams.

‘It is an unsettled period for everyone – players and staff.

‘I think the players are protected under their agreement but the staff might not be and that is something that has to be sorted out.

‘All I am concerned with is keeping everyone together, protecting my players and staff, when I meet the administrator in due course.’