The League One club faces an uncertain future

Sheffield Wednesday have 28 days to settle their debts with the taxman after telling the High Court they had already made a "substantial payment".

Hugo Groves, representing the club, asked for the adjournment of a winding-up petition by HM Revenue and Customs.

He said money from the sale of players had been used to reduce the outstanding PAYE balance of £550,000.

But HMRC said more money was owed since proceedings began and was granted permission to amend the petition.

"There are also very serious and advanced negotiations for the sale of the club," Groves told Mr Registrar Peter Nicholls.

The League One club has been dogged by financial problems since their relegation from the Premier League in 2000, with estimated current debts of about £26m.

Last week, it was revealed that a locally-based consortium was believed to be close to tabling a bid to take over the Owls.

In January, the club entered takeover talks with Chicago-based investment company Club 9 Sports but no agreement was made between the two parties.

Earlier, a HMRC spokesman said: "We can't discuss individual cases.

"HMRC doesn't initiate insolvency action against football clubs - or any other business - lightly.

"But we will not hesitate to do so when that is the right way to protect the country's tax revenues and other creditors from those who trade whilst insolvent and run up debts that they simply cannot pay.

"Ensuring tax is paid on time should be at the centre of football's business strategy just as it should be for any other enterprise.

"Any business that regards paying tax as an optional extra after other expenses are met or that uses tax collected from employees or customers as working capital is potentially heading for trouble."

Wednesday's financial problems follow those of the likes of fellow League clubs Portsmouth, Cardiff City, Preston North End and Southend.

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