Anthony McGrath is one of Yorkshire's longest serving players

Chief executive Stewart Regan said in a statement: "We are now in discussions with our solicitors regarding the possibility of legal action."

He claimed McGrath and his agent could both be sued because the player still has two years left on his contract.

McGrath said: "I am leaving as a result of my differences I have not been able to resolve and for no other reason."

He rejected claims he was moving for financial gain, adding: "I can only presume that leaving the club in these circumstances will only make me worse off financially than had these differences not occurred."

At the end of the 2006 season, the 31-year-old former England all-rounder turned down a three-year deal which was described by the club as "lucrative with significantly improved terms".

606 CRICKET Yorkshire's current plight is nothing short of extraordinary Oliver Brett 606: Have your say

Yorkshire are still reeling from the shock of Chris Adams' decision not to move from Sussex to take over as captain and pro cricket director.

The club, which McGrath claims has been poorly run in recent years, is desperately hunting for leaders.

With pre-season training starting on 1 March, there is no captain - a position McGrath turned down - no director of professional cricket and no director of cricket operations.

Last November, Sussex hero Chris Adams agreed to be captain and director of pro cricket at Headingley.

In all cases he chose to turn down the club's offers Yorkshire CCC statement

But two weeks later he had a change of heart and headed back to the south coast.

It is not yet clear whether McGrath has agreed terms with another county, but Yorkshire insist they have done their utmost to keep him.

Until Yorkshire agree to give up his registration, McGrath will be unable to play elsewhere.

In its statement, the club said: "We have worked tirelessly over the past few months trying to find a solution to the grievances raised by Anthony.

"This has included the offer of releasing him from two years of his contract at the end of the 2007 season if he was still unhappy.

"In addition, he has subsequently been offered the captaincy of the club, an improved package of personal terms and the chance to lead the team he has played for since his childhood.

"In all cases he chose to turn down the club's offers."