The prospective owner of troubled Scottish giants Rangers admitted Tuesday that British tax officials will vote against his proposal for a way to exit administration.
Charles Green, who is leading a consortium aiming to buy the club, had hoped to persuade creditors to agree to a Company Voluntary Arrangement (CVA) -- where creditors are offered a percentage of total monies owed -- thereby allowing Rangers to exit administration.
However, the decision of Her Majesty's Revenue and Customs (HMRC) -- which are owed more than £21 million ($32.6m) -- means that Green must now instead push ahead with plans to buy the club's assets and form a new company, a move which could force them to apply for re-entry to the bottom tier of the Scottish league.
Green said in a statement: "I am hugely disappointed by the decision of HMRC not to support the CVA proposal and that disappointment will be felt acutely by Rangers fans across the world."
HMRC believe their decision to force liquidation will allow them to pursue individuals for the debt.
A statement from the tax authority read: "A liquidation provides the best opportunity to protect taxpayers, by allowing the potential investigation and pursuit of possible claims against those responsible for the company's financial affairs in recent years.
"A CVA would restrict the scope of such action.
"Moreover the liquidation route does not prejudice the proposed sale of the club. This sale can take place either through a CVA or a liquidation.
"So the sale is not being undermined, it simply takes a different route.
"Liquidation will enable a sale of the football assets to be made to a new company, thereby ensuring that football will continue at Ibrox.
"It also means that the new company will be free from claims or litigation in a way which would not be achievable with a CVA.
"Rangers can make a fresh start."
If Green forms a new company, he will have to apply to the Scottish Premier League (SPL) to acquire Rangers' share in the competition. The clubs themselves will decide whether to accept.
A new Rangers would not be able to compete in Europe for three years under UEFA rules.
Rangers' administrators, Duff and Phelps, released a statement saying that Green's consortium will move to acquire the club's assets immediately after the formal rejection of the CVA proposal at a creditors' meeting at Ibrox on Thursday.
HMRC's court action forced Rangers into administration on February 14 after the club failed to pay millions of pounds in taxes due following the takeover by Craig Whyte in May last year.
Rangers could also face an additional tax bill of up to £75million over their use of Employee Benefit Trust payments to players and staff between 2001 and 2010, which were the subject of a tax tribunal in January.
This scheme, which was administered by the company of former owner Sir David Murray, is also the focus of an SPL investigation into alleged undisclosed payments to players.