Portsmouth FC have been dealt another blow after their application to have a winding up petition from Her Majesty's Revenue and Customs struck out was dismissed by a British High Court judge today.
The club has argued that the VAT portion of its massive tax bill is too high by £7.5m (€8.6m), but failed to convince Mr Justice Newey of this today.
A spokesperson for the Judicial Communications Office said: "At the High Court today Mr Justice Newey dismissed an application from Portsmouth City (sic) Football Club Limited for a winding up petition to be struck out. A further hearing to consider HMRC's winding up petition will take place in due course."
That hearing is now expected on February 10, and the outcome could send Portsmouth a step closer to being the first Premier League club to drop into administration.
Today's decision is the latest blow for Pompey's owner Ali Al Faraj, who has been battling huge debts since the day he took over.
However, an argument with the tax man is by far the most serious, particularly given HRMC's increased willingness to serve football clubs with winding-up orders since losing their status as a preferred creditor of those in administration.
Portsmouth have been fighting financial fires on several fronts this season.
They have three times failed to pay their players on time, and only last week saw the Premier League divert £7m in television revenue payments to other clubs who were still owed transfer fees by Pompey.
The Premier League made that move after meeting with club officials but coming away unconvinced that they were in any position to pay their debts on a series of deals, many involving players such as Glen Johnson and Lassana Diarra who have since been sold on.
That has prompted the club to threaten arbitration proceedings against the Premier League, who have imposed a transfer embargo on the club.
The club's executive director Mark Jacob said yesterday: "The Premier League are withholding the balance of monies they owe us because they believe that we still owe other football clubs money.
"We have now paid off the three UK clubs. We have agreed with Rennes and Lens to accept certain payments now and then defer a schedule of payments going forward. We are finalising the agreement with Udinese.
"The total amount that we directed the Premier League to discharge and pay these clubs is approximately £5m. So there is a net balance due to the club approaching £2m. We cannot see how they can keep the money and also continue with the embargo.
"We believe the embargo should be lifted immediately and that we should be receiving money from the Premier League.
"Today we have delivered a letter to the Premier League asking to pay back the money. We have called for a meeting tomorrow and if this fails or we don't get our money back then we shall exercise the powers of arbitration.
"Once again we are being treated as the poor relations and the black sheep of the family.
"We feel we have come in and been fully open and frank with them to explain the club's position, where we are and how we'd like to go forward.
"We would like them to use their discretionary powers in a positive fashion rather than negative fashion against the club."