Prospective Gateshead owner Chris Dunphy has withdrawn his interest in taking over at the National League club.
The former Rochdale chairman held talks with Gateshead’s financial advisor Joe Cala on Friday afternoon and agreed a takeover deal in principle.
However, there has been little movement on the deal since the initial agreement was struck and Dunphy has now brought an end to his interest in the club.
In a statement he said: “It is with regret I have to announce that I am withdrawing my interest in the purchase of Gateshead FC from the current owners.
“Negotiations have been difficult and protracted but the progress I anticipated has not been made.
“I wish everyone at the club success in finding a solution to the club’s financial problems.”
Dunphy has contacted the club’s General Manager Alisha Henry and Gateshead Soul Independent Supporters Association chairman to explain his decision.
The news will come as a further blow to Gateshead’s players and staff, who released a statement on Tuesday condemning the conduct of Cala and the club’s owner Dr Ranjan Varghese.
The club’s staff are still awaiting their wages for March, which were due to be paid on Friday.
The Echo believes that the final straw came on Tuesday night when Cala informed Dunphy via text that an exclusivity agreement would be signed and returned to him by Varghese within hours.
However, as yet that agreement has not been signed and remains with the Hong Kong-based businessman.
The Echo has spoken to a source close to the former Rochdale chairman and he said “Chris feels that the way Gateshead’s owners conducted themselves means that he had no alternative but to withdraw his interest.
“It would be a case of never-say-never in regard to getting involved with Gateshead at some point, but it certainly won’t happening until the club’s current owners.
“He is saddened by the situation and was genuinely excited by working with people at the club, because he had been very impressed with the coaching team, the players and the staff working behind the scenes.”