Hornets chairman Jimmy Russo was forced to lend the club's parent company another £1m on Friday but the loan will only cover the company's costs until December 22.

If more funding is not found before Christmas then Watford Leisure Plc may suspend trading of its shares on the London Stock Exchange.

A statement released by Watford Leisure this morning read: “The November loan will only be sufficient to cover the company's cash requirements until 22 December 2009.

“In the event that further funding is not available to the club before 22 December 2009, then the board would seek a suspension of trading in Watford Leisure's shares on AIM pending clarification of its financial position. Further announcements will be made in due course.”

Watford chief executive Julian Winter has been in discussions with major shareholder and reported billionaire Lord Michael Ashcroft over the possibility of raising funds for the company.

But this morning's statement confirmed that those discussions have yet to bear fruit.

The statement read: “The board has had no success to date in securing agreement between the major shareholders of the company in relation to a possible equity fundraising, although the board believes that options which it has proposed are still being actively considered. The board continues to consider all fundraising options open to the company.”

There have also been a couple of changes to the structure of previous loans made by Russo and his company Valley Grown Salads.

Prior to last week, VGS had lent Watford Leisure £2.63m and Russo personally had loaned the company £1.25m.

This has now been restructured. Russo is being repaid but the money loaned by VGS will increase to £4.88m, which consists of the initial £2.63m, last Friday's £1m and the additional £1.25m.

Previously VGS was being paid interest of 3.5 per cent plus Barclays Base Rate, which is currently 0.5 per cent. But now that has increased to 4.5 per cent plus Barclays Base Rate.

The £4.88m owed is secured against the Vicarage Road Stadium, which effectively means Russo could sell Watford FC's ground if he is not repaid, although this is highly unlikely to happen and is used more as a safety net.

Earlier this month it was revealed the Hornets needed to generate £6.5m before June 2010, but today's statement confirmed Friday's £1m injection has reduced the shortfall to £5.5m.

Click here to see statement