The cash-strapped Italian giants are also being pursued by Spanish outfit Valencia for monies owed for midfielder Gaizka Mendieta.

Lazio agreed a �16.5m fee for Stam in August 2001, and Manchester United claim they are still owed �12m for the Dutch defender.

Gruppo Cirio, the Italian food company who have a controlling stake in the Rome club, have been declared insolvent, leading to the suspension of trading in Lazio shares.

A statement from the Old Trafford club said: "Manchester United Plc has noted press coverage regarding the current financial situation of Gruppo Cirio, an Italian food group, which owns 35% of SS Lazio.

"Manchester United has received no further payments from SS Lazio in respect of the �12million owed for the transfer to SS Lazio of the registration of Jaap Stam.

"Discussions have been ongoing to reach agreement for a rescheduling of the payment of this debt, and compensation for the delay, but these have still not reached a conclusion."

The statement added United have initiated legal proceedings while these discussions continue and are still hopeful of reaching a satisfactory conclusion.

Stam joined Manchester United from Dutch club PSV Eindhoven for �10.75m in July 1998.

But he was shipped out of Old Trafford in August 2001 following revelations in his autobiography, claiming Man Utd manager Sir Alex Ferguson had made an illegal approach to him while at PSV.

In January Stam was banned for five months by the Italian football federation after failing a drugs test.

Mendieta is currently out on loan to Barcelona, as Lazio attempt to rein in their crippling debts.

Italian newspaper Il Mondo claims Lazio owner Sergio Cragnotti has reached an agreement with Valencia over the �7.6m they owe for the Spanish international.