THE Treasury has been condemned for treating York City "unfairly" by forcing the cash-strapped football club to pay back 63 per cent of its debts.

Other clubs going into administration, including Leicester City and Darlington, have been allowed to get away with paying much less to their creditors, says a senior Peer.

Yet the biggest creditors to smaller clubs such as the Minstermen were often Government departments - the Inland Revenue and Customs and Excise, said Lord Clarke of Windermere.

He claimed, their insistence on being paid almost certainly cost York City its status as a Football League club last year - as the manager was unable to buy new players to shore up the floundering team.

During a debate on football Lord Clark, a Carlisle United supporter, said: "One must question why, when Carlisle repaid 100 per cent and York paid nearly 70 per cent, both teams went out of the league as a result. The clubs were left with huge debts.

"Yet other teams, such as Darlington, paying less than a penny in the pound, and Leicester City ten pence in the pound - I will not even look at Bradford who have been there twice - remain in the league.

"That cannot be right. The Inland Revenue has a point to answer." York was asked to pay 63p in the pound to Inland Revenue officials.

Lord Davies of Oldham, the Government's culture minister in the Lords, said the Department of Trade and Industry was responsible for the fairness with which football clubs were treated while in administration.

But he said: "I recognise the point that he makes, and he will appreciate that there is a particular difficulty about football as a business when it comes to the question of its debts building up, and that is that football clubs are going businesses only for as long as they play football and fulfil their fixtures.

"Therefore, there is a real problem for the authorities with what dramatic impact they make upon a club in mid-season because of money that is owed to the Inland Revenue, which might vitiate the long-term future of that club entirely.

"There are difficulties with this industry, but I recognise the point that he makes, and obviously he has a right to expect fairness in treatment."

Last year, City of York MP Hugh Bayley, pictured, urged the Treasury to give tax breaks to the supporters trust running York City.

Labour MP Mr Bayley told Paymaster General Dawn Primarolo that the supporters who run the Minstermen were working to keep the club alive - not making a profit.

He asked if the Inland Revenue could offer any tax breaks to ease the financial burden on the club.

Updated: 10:08 Friday, January 07, 2005