WATFORD Football Club faces the prospect of going into administration unless a rescue package is put together by December 22.

Despite the gloom surrounding the club this week, chairman Jimmy Russo is confident a solution can be found.

He was forced to loan the club’s parent company, Watford Leisure Plc, £1 million on Friday to save it from administration.

But if more money is not found, the board says it will seek to suspend the trading of shares on the Stock Exchange.

The club must raise £5.5m between now and June and, as a result, Watford chief executive Julian Winter has been in discussions with major shareholder and reported billionaire Lord Michael Ashcroft over the possibility of raising the money needed through a possible rights issue.

However, the Watford Observer understands that Lord Ashcroft is reluctant to make a further investment and is yet to respond to the club’s proposals.

Friday’s £1m deal means Russo has now loaned Watford Leisure £4.88m – £4.64m since January – through his company Valley Grown Salads, Mr Russo explained: “If I had not made that £1m investment then we would have gone into immediate administration because we couldn’t pay our bills.”

The Hornets chairman only rejoined the board a year ago and Mr Russo confirmed there was an £11m shortfall when he arrived.

Although Watford has managed to reduce that sum by half through loans and players sales, the club still needs to raise £5.5m by June 2010 – not December 22 as incorrectly reported in the national media.

However, a package needs to be in place in just over a fortnight in order for the club to meet its current financial liabilities including player wages.

“In order for us to honour all our contracts, we need to arrive at that sum of money,” Mr Russo explained.

“But I am positive for the future and I am positive we will not go into administration. The club’s directors know where we are.

“I would say the club has a good future if we can get out of the next few months.”

Negotiations with Lord Ashcroft seem to have stalled and with Watford Leisure’s AGM taking place on Tuesday, December 15, the current board could be voted off should two of the main shareholders Lord Ashcroft, whose Fordwat Ltd has a 37 per cent stake, and former chairman Graham Simpson, who holds almost 17 per cent, join forces.

Chief executive Mr Winter confirmed a meeting between himself and Lord Ashcroft took place in mid-November and is now waiting for the deputy chairman of the Conservative party’s response to the proposals put forward.

Mr Winter said: “We had the meeting. He was pretty open to any proposals. We didn’t talk specifically about any of the proposals.

“Nothing was off the table from his prospective so the board can put proposals to him and he will consider them. It is in his court.”

Unlike Championship rivals Crystal Palace, Watford’s employees have been paid on time. We also understand certain board members have questioned the validity of Watford remaining a public limited company as they feel it adds unnecessary additional expense.

The club has attempted to gain funding from other sources but has so far been unsuccessful.

More than £6m was raised through player sales in the summer and although Mr Russo has ruled out a “mass exodus” of players during the January transfer window, he claims not much has changed in the past 18 months.

Mr Russo said: “You [Watford Observer] broke the story last year that the club was £10 million short and actually it hasn’t changed much.

“There hasn’t been a fairy godmother saying ‘here is all the money, you no longer have a problem’.

“As chairman I face two big dilemmas. One to make sure the club is sustainable in the league and we have a team that can compete – and I think we have delivered that so far and I am proud of what we have done.

“On the second front, we face an ongoing battle because of the expensive contractual agreements which the board inherited.

“The position has always been the same.

“We have gone to many institutions and many individuals trying to seek financial help and there has been no appetite for it.”