Newcastle manager Chris Hughton will have to rely on free transfers and loan deals to build for life in the Barclays Premier League as the club cannot afford to spend any money on new players.

In a lengthy statement issued on behalf of the club's board, the Magpies outlined their financial status and the news was not good.

They recorded an operating loss of £37.7million for the financial year 2008-09 and are estimating a shortfall of £32.5million for 2009-10, while their £20million overdraft is already committed.

They have now drawn up a five-year plan which they believe will enable them to break even by the end of the 2015-16 financial year.

That will mean no new capital outlay on players this summer following promotion from the Coca-Cola Championship, meaning Hughton will have to generate his own funds or rely on free transfers and loan deals.

The statement, which also confirmed Hughton will remain as manager amid speculation over his future, said: "It is clear to the board that no organisation can be successful, until the financial position is stabilised.

"The board have therefore structured a five-year plan in which the ultimate goal will be to ensure that the club is run at a 'break even' manner by the year 2015-2016.

"The first team squad that won the Championship this year will form the basis of the team for next season in the Premier League.

"There is no plan for new capital outlay on players."

The news will come as a blow to Newcastle fans, who had hoped Ashley would invest in new players this summer, although the message coming out of St James' Park for some time has been that there would be little cash with which to play during the close-season.

Copyright (c) PA Sport 2009, All Rights Reserved.

Do YOU want to write for GiveMeSport? Get started today by signing-up and submitting an article HERE: