The Football League have prevented Southend from extending George Friend's loan deal until they settle a debt to HM Revenue & Customs.
The Shrimpers revealed last week that Wolves full-back Friend would be staying at Roots Hall for a further month.
But the Football League informed the League One side on Friday that the deal could not be sanctioned, due to their debt to HMRC.
A statement on Southend's official website read: "On Monday last week the club agreed to extend George Friend's loan with Wolverhampton Wanderers.
"The paperwork was then submitted to the Football League, who subsequently advised that the newly-adopted rules relating to HMRC prevented us from extending the loan until the position was sorted."
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