The figure, which reflects the 12 months up to the end of June 2002, is almost double that of the previous year.

Investment "both for current and long-term success" is cited as the reason for such massive losses.

But honorary chairman David Murray insisted that steps were already being taken to avoid a repeat of such figures.

"At the same time, Hughes, Malcolm, McGregor and Ross have all graduated from the youth development programme to regular participation with the first team."

Murray told BBC Scotland that the creation of Murray Park, Rangers' state-of-the-art training facilities, was a large part of the reason for the huge losses.

But he stressed that it would also reduce costs in the long term as the club started to produce more of its own talent.

He added: "We have a strong budget, we have players coming out of contract, we've already started to lower the wage bill and we would make a small loss in single figures next year, but that's without any success in Europe or domestically.

"But there are two places available in the Champions League this season, our aim is to win the championship of course, and we still have a very strong squad of players."