Portsmouth are set to become the first Premier League club to go into administration after owner Balram Chainrai served notice of his intention to put the club into the hands of insolvency experts on Friday.
Chainrai said it was now unlikely that a takeover deal would be done before the end of the week and administration will prevent the club from being wound up in the High Court on Monday.
But it will also mean certain relegation for Pompey - there is an automatic nine-point penalty for any Premier League club going into administration and that would leave the side on just seven points, 16 behind their nearest rivals.
After that there is the prospect of a continuing player exodus and a long period of rebuilding in the Championship.
Chainrai is still in talks with four different consortiums about a takeover but any chance of a deal being done is remote, and with a winding-up order due in the High Court on Monday, the decision has been taken to go in to administration instead to save the club.
A statement read: "Businessman Balu Chainrai, the owner of Portsmouth Football Club, has served notice that the club will go into administration unless new owners can be found by Friday.
"Mr Chainrai and fellow investors from his Portpin investment vehicle, are in London to continue talks with representatives of four different groups interested in buying the south coast club, but have had to reluctantly accept that it is now unlikely a deal can be done before a winding up hearing due to be heard in the High Court on Monday."
Chainrai's spokesman Phil Hall said administration would keep the club alive as the winding-up order is now automatically suspended.
Portsmouth have debts of £70million and the winding up order was over £7.5million owed to HM Revenue and Customs.
One possible big loser from the club going into administration is former owner Sacha Gaydamak, who says he is still owed £30million.
The £17million put in by Chainrai and Portpin as a loan to the previous owner may also be difficult to reclaim though he has suggested a deal where the club would pay him £1million a year rent for Fratton Park until he has recouped the cash.
Chainrai's spokesman Phil Hall said none of the four consortiums had made a credible offer.
Hall said: "Mr Chainrai is looking for absolute credible proof of funds and trying to avoid the mistakes the previous regimes have made.
"Administration would mean the club re-emerging as a healthy financial entity and it would then become an attractive proposition for a potential buyer who could invest new funds in re-building the club's future.
"The serving of this notice means the winding up order is automatically suspended. It means the club is safe, it can fulfil its fixtures and as far as is possible it is business as usual.
"Mr Chainrai has agreed to continue funding the club going forward until its long-term future is decided and he will also pay for the administration process out of his own pocket."
Hall said Chainrai and his associates were "victims of circumstances" having given a £17million short-term loan to the Al Faraj Group, who said it would be repaid in November.
Some fans have blamed club chief executive Peter Storrie and former manager Harry Redknapp for overspending on players and wages, but the current Tottenham boss claims it is "extraordinary" that Portsmouth are in such debt.
Redknapp said: "It never entered my mind when I was there, that there would be problems. The club was run well.
"When Sacha [Gaydamak] came in, all I knew about him was him and his family were mega-rich people from Russia. It never enters your mind the club could end up in debt.
"As I have said many times, to make something like £60million from players and end up in the debt they are in, I find it extraordinary really.
"The key is finding an owner, someone who is going to come in, buy and save the club and take the club forwards again.
"The last three or four they have come up with have been a disaster."
Storrie has admitted that most of the club's spending has gone on players wages - £131million over the last three years - and transfer fees.
Storrie said: "The bulk of the money has gone to the players in wages. The cost of the players' wages this year is £37m. Last season, when it was running at its height, it was £52m, and the year before it was £42m.
"The vast majority of the money over the last two to three years has gone on players' wages, and also on their transfer fees."
Meanwhile, a training ground clash between Jamie O'Hara and Michael Brown has been dismissed as a minor altercation.
A source said: "It was just handbags, the sort of thing that happens regularly at training grounds."
