York City fans' bid to save the club is "teetering on the brink" while tax chiefs decide whether to give the club a much-needed break, MP Hugh Bayley has warned.

The Inland Revenue is considering an offer which would allow the cash-strapped club's tax bill to be cut from £161,000 to £80,500.

A rescue package which would see the York City Supporters' Trust take over the running of the club, has been on the table since February 11, but has stalled while the tax decision is awaited.

Mr Bayley said that at a meeting earlier this week between the supporters' trust, the administrator and the club's creditors, an agreement for the takeover of the club by the trust foundered because they could not reach an agreement on tax with the Inland Revenue.

The administrator offered a payment of 10p in the pound, followed by 20p, but both these were rejected by the Inland Revenue. A final offer of 50p in the pound is now being considered.

Mr Bayley has written to sports minister Dick Caborn and Treasury minister Dawn Primarolo urging them to intervene.

In a letter to Ms Primarolo, he said: "It is essential that the supporters' trust has a decision from the Inland Revenue's Voluntary Arrangement Unit as a matter of the utmost urgency. The supporters' trust is currently paying thousands of pounds to maintain the day-to-day running of York City until a decision is made.

"If a decision is not made before the reconvened creditors meeting on Monday, it is almost certain that York City Football Club would go into liquidation, resulting in expulsion from the football league."

tony.tierney@ycp.co.uk

Updated: 12:21 Saturday, March 22, 2003