Rio Ferdinand cost Leeds �18m

Income from TV rights nearly doubled to �36.6m last year, with "the majority" of this increase down to the European campaign.

Despite the cup run, Leeds failed to qualify for the Champions League again this season and is instead competing in the Uefa cup.

The club admits that not being in Europe's main cup competition means it will suffer financially.

"The absence of Champions League football this season will inevitably have a short term impact on operating profit performance," said the club's chairman Peter Ridsdale in a statement.

"Rejoining the Champions League at the earliest opportunity, which is now achievable with a top-four league position, and participating therein on a regular basis, is our top priority," he added.

So far Leeds have made a promising start to the new season, and on Sunday beat Derby County 3-0 to go top of the English Premier League.

New players

The main reason why Leeds failed to make a profit was the club's spending on new players.

Expensive signings such as the defender Rio Ferdinand and striker Mark Viduka meant the club recorded a loss last year.

The club announced that it is restructuring the debts built up from buying new players through a �60m, 25 year bond which has been agreed with institutional investors.

"We now have stable long-term financing, additional revenue drivers, a brand that continues to grow and to attract ever more supporters and sponsors to us, and a strong team in a position to challenge credibly for the game's top honours," said Mr Ridsdale.

Shares in Leeds United remained unchanged at 10.25p following the release of the results.