Sheffield Wednesday are still on course to complete a major new investment deal in time to stave off the threat of administration, club sources insist.

The npower League One club, which has debts of around £26million, had been hoping a Dubai-based consortium would complete a takeover in time to settle outstanding tax debts, reported to be in the region of £1million. But with a winding-up petition due to be heard in the High Court on November 17, the businessman leading the consortium hoping to save the Owls has withdrawn his interest.

A senior club source said: "The developments are being painted in certain quarters as a major blow for the club. But the reality is that we are in same position as we were two weeks ago, namely that a number of parties are in detailed talks with the Co-operative Bank over a long-term investment plan for Sheffield Wednesday."

The source added: "Everybody involved in this process wants to see a successful conclusion that ultimately leads to the end of the club's financial worries."

Dubai-based Kevin Mundie, a senior executive at Certified Oilfield Rentals (COR), has pulled out of the deal for "business and personal reasons wholly unconnected with the club" and a £2million advance the club had been hoping to use to ease cash-flow problems and placate the tax man has failed to materialise.

In September the club's main creditor, the Co-operative Bank, stumped up £800,000 to fend off a first winding-up order served by HM Revenue and Customs, but are reluctant to bail out Wednesday for a second time if there is no prospect of major new investment from elsewhere.

The winding-up orders relate to outstanding PAYE, which amounts to £300,000 a month for a club that has suffered years of under-funding since spending beyond their means and falling out of the Premier League at the end of the 1999/2000 season.

Former chairman Dave Allen, now majority shareholder at Chesterfield, says he is prepared to give up his 9.5% holding in Wednesday for nothing and also waive interests on his loans to the club as they bid to push through a deal.

He said: "If I get the £1.5m I loaned to the club back, without interest, I will give them my shares. In total, I'm owed about £2.4m but I'm prepared to take £1.5m."

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