Blues' boss Joe Royle says that Town could not turn down Portsmouth's £750,000 offer for Matt Holland. Royle cites the continuing reduction in transfer fees across the board and the club's need to fulfil commitments made in the Company Voluntary Arrangement (CVA) agreed with creditors last month as the major factors behind the decision to accept the bid.

He says the surprisingly low fee is symptomatic of the transfer climate as a whole: “It's what the market is like at the moment. It's very nervous and this is the only solid bid we have had. We are led to believe that this is a club that Matt will consider and personal terms still have to be agreed and we have to accept it.

“We've made promises to our creditors, to our administrators and to our banks, that we will get cash in and reduce our wage bill. Matt's one of our highest earners and as such we can't hang on any longer.”

The CVA proposal document revealed Town's wage bill at £1.2 million a month as of February. Since then one other high earner has departed, Hermann Hreidarsson, while Darren Ambrose, on a much lower amount, has also left. Hreidarsson and Holland are thought to have been on contracts worth £17,000-a-week.

Finidi George's expected departure will also help reduce wage liabilities over the next two years while the contracts of Mark Venus, Fabian Wilnis, Richard Naylor, Jim Magilton and those of a number of youngsters like Robert Dickinson are all up at the end of June. Wilnis, Naylor and Magilton have been offered new deals which will see them take a large reduction in pay.

Royle is disappointed that Holland has to go and says he is surprised that a larger club than Portsmouth hasn't come in for his skipper: “It's not take lightly this move and it's very sad. Matt's been outstanding, player of the year last year, and never misses a beat, never misses a game and I'm amazed that one of the bigger clubs haven't been interested.

“We will miss Matt immensely but we have other players who can come in. We certainly shan't be replacing Matt like-for-like, we can't do that. There's no player that we can afford that is of Matt's abilities. But we have youngsters within the club and experienced players within the club and I don't think we'll need to get an extra midfield player in just yet.”

The Town boss says that if Holland does go the club will be in a stronger position to hold off other offers: “It means we can be more discerning and selective as to who does go. It would get a major wage off our bill. There has been interest in some of our younger starlets - Darren Ambrose had to go when we were in administration. That is no longer the case now, we do have a greater control over our destiny.”

Royle has already added free transfer Drissa Diallo to his squad and expects that further signings will be in a similar vein: “Transfer fees are coming down everywhere. There are a lot of Bosmans, there are a record number of frees on the PFA list this year and I'm sure we can root through there and find players who can come in on sensible wages and on sensible contracts who will help take us forward.

“We were one place outside the play-offs last year and certainly expect a big improvement on that this year.”

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