Chelsea Village, the firm which owns Chelsea Football Club, has predicted an end to the age of player wage rises blamed for causing financial crisis.

Company chairman Ken Bates said that players' wages, "the biggest single problem facing football", had peaked.

"For the 2002/3 season onwards it is expected that they should show a gentle decline," Mr Bates said.

Latest figures from consultants Deloitte & Touche showed Premiership salaries rising by 20% a year.

And Premiership club Manchester United, reporting record half-year profits on Tuesday, blamed higher wages for a rise of nearly 30% in costs.

Hotel takings fall

Mr Bates' forecast came as he revealed Chelsea Village had run at a loss of �4.1m over the last six months of 2001.

Excluding player transfer activities, the firm ran at a profit of �169,000.

The company's hotel arm was hit by a fall-off in visitor numbers after the 11 September attacks, with average rooms rates falling to �61, from �86 a year before.

Mr Bates credited a shake-up in the merchandising department for a rise of 22% in mail order sales of club gods, with trade over the internet doubling.

"It is these areas where we are looking to grow the business, by redesigning our internet site and extending the product range," Mr Bates said.

The announcement was released after close of trading on the London's Aim stock market, where Chelsea Village is listed.

Chelsea Village shares, which hit a closing high of 129p in May 1997, ended at 18p on Tuesday.