CITY of York Council will take over the repayment of York City's £2 million Football Foundation loan - as long as the football club's books are in order.

Financial experts are expected to run the rule over the Minstermen's balance sheet within the next few weeks, and if no problems are found, the local authority will step in to remove the huge millstone from the club.

The council has also reconfirmed its commitment to building a community stadium in York by using cash generated from the sale of Huntington Stadium - home of York City Knights - and Bootham Crescent, depending on the outcome of further consultation with people living near the Jockey Lane venue and its current users.

Following the Guildhall meeting of the council's staffing matters and urgency committee, York City's community and communications director Sophie McGill said the decision was a major boost for the club.

"In principle, all parties are backing a community stadium for the city and supporting the creation of some financial assistance to ensure professional football in the city has a future," she said.

"The whole concept of a community stadium will be positive for the city of York - it's not only about football, but also about rugby league, and we have also heard about providing a facility for athletics in the city.

"We will be working very hard with officers from the council to progress the situation. An independent financial review will be taking place to ensure that York City will be viable in the future and we will assist with that and provide any necessary information. We hope this will happen within the next two weeks.

"Everybody recognises, which is fantastic for us, that time is of the essence. We really need to move this project forward - we have been talking about it for a number of years and I feel a tremendous breakthrough has been made for York City and our supporters as well as other sporting clubs. We can see a bright future."

If the council does assume responsibility for the £138,000 City currently have to find each year to repay the loan - taken out to regain ownership of their stadium from previous owner Douglas Craig and his fellow Bootham Crescent Holdings directors Barry Swallow and Colin Webb - any interest accrued through the authority's borrowings would be returned through equity raised through the sale of City's home.

The council can also borrow money at more favourable interest terms than the 6.9 per cent City are currently being asked to pay.

The committee's chair Steve Galloway said: "We have an opportunity to help sport in York - more particularly, the football club is an asset to the city and they need to be able to see a way forward.

"However, we do not want to put money into something which does not secure the future of the football club for the next four years, which is probably as long as it would take for a new stadium to be ready, and be left with a white elephant. We need to ensure there is no risk to the council taxpayer."

The council also approved the first £1 million raised from any sale of Huntington Stadium being used to relocate the athletics club currently based there.