The Inland Revenue has confirmed it will launch a legal challenge to chairman Ken Bates' attempt to buy back Leeds United.
Bates placed the club into administration following their relegation to League One in early May, but immediately formed a new company to buy the club back.
At a stormy meeting last month the club's creditors narrowly agreed a 1p-in-the-pound offer as part of a Creditors' Voluntary Agreement (CVA) but had the option of mounting a legal challenge within 28 days.
The Inland Revenue, who are owed almost £8million in unpaid takes, have now decided to launch a challenge, despite Bates upping his offer to 8p-in-the-pound earlier in the week in a bid to avoid any such legal action.
"The club can confirm that the Inland Revenue have served notice of their intentions to challenge the CVA," confirmed a Leeds statement.
"We remain confident of a positive outcome despite this disappointing news and will carry on with business as usual in the meantime."