Jimmy Russo insists Watford will not be forced to sell their star players in January despite the club’s need to fill a £6.5m shortfall by June.

This week the football club’s parent company, Watford Leisure Plc, released its annual report and financial statements for the year ending June 30, 2009.

In his chairman’s statement in the report, Russo confirmed the company needs to fill a £6.5m hole before June and the Hornets will have to sell players “year on year” to meet the financial requirements of the business.

But when asked whether fans will see a similar exodus of players as in the summer, Russo replied: “I am not forced to sell anyone, I am not in a forced position.

“If an offer comes in and it is good for the club and we have an adequate replacement lined up, then I will go to Malky and say this is what we have got.

“But I cannot just take his best players away and give him nothing. Somebody would have to come in.”

Russo claims there needs to be further investment of capital “in order for the club to survive”.

Watford’s chairman and his brother, Vince, have been forced to loan the club almost £4m, via their Valley Grown Salads company, since January to stop the Hornets from going into administration, but the board hope to “achieve an equalised budget” by June 2011.

Although Russo maintains manager Malky Mackay will not be forced to sell players in January, he concedes it may happen.

“The priority is always the survival of the club so maybe players will be sold,” Russo said.

“Anything can happen. If the deal is what is best for the club and will help its survival then we have to do what is best for the club.”

Watford have sold or released 12 players since Easter, with the club cashing in on Tommy Smith, Tamas Priskin, Leigh Bromby, Lee and Mike Williamson, Theo Robinson and Jobi McAnuff.

A large proportion of the money from these transfer fees will be received during the course of this season but much of it will be used to repay loans.

Russo stressed “it would have been a hell of a lot worse” had those players not been sold but added: “We still have to bring players in because we have to be competitive. At the end of the season we do not want to be finishing one place above the relegation places.”

The Hornets boss is desperate to add more experience to his squad but admitted last week that any new additions are likely to be loan signings due to the club’s financial position.

However, Russo stated there was some money to spend but the amount will depend on whether loanees Tom Cleverley, Henri Lansbury, Craig Cathcart and Heidar Helguson remain at the club.

Russo said: “There is a small amount there because we have to keep the team moving on and progressing. But we do not know the situation of our loan players yet.

“We have loan fees we have to pay and depending on if we do or do not pay the loan fees then we could go into the market and buy more of our own stock.

“But we are not looking to buy players if they are not of the calibre that we want.”

Russo believes it is crucial to keep hold of the Hornets’ best players but he was also keen to stress the importance of retaining club staff.

He said: “Despite all the transfers coming and going, it is important that off the pitch we do not lose valuable staff that have contributed enormously to the club’s improved position. I am referring to the senior management team and in particular [chief executive] Julian Winter.

“He lives and breathes the job every day. His attention to detail is fantastic.

“I made the point in the annual report that it is really important to me that people continue to do the good work they have done under lots of pressure.”

Click here to read more about the annual report

Click here to read the annual report in full