Ken Bates may have won the battle to own Leeds United but his problems are far from over.

HM Revenue and Customs may go ahead with their High Court case on 3 September challenging the way the administration was handled and former manager Kevin Blackwell has issued a libel action against Bates along with the Sun and journalist Mark Irwin.

Blackwell is asking for £100,000 in damages for a story in which Bates alleged among other things that Blackwell had lost control of the dressing room and that his incompetence would have led to Leeds being relegated in December.

The former Leeds manager, now in charge at Luton, claims the story seriously injured his reputation and that he has suffered considerable upset and embarrassment.

Leeds' chief executive Shaun Harvey has revealed a further problem for the new company. Even when manager Dennis Wise is given permission to start signing players - he only has 17 in his squad at the moment - his hands will be partly tied throughout next season.

Harvey said: "We will have to operate inside a budget for players' wages which will be agreed with the League based on our turnover and profitability. But this will not limit the number of players Dennis can sign."

It does however underline the need to sell some of the experienced players who are on higher salaries and could see players like Eddie Lewis added to the exit list.

Meanwhile Leeds are going ahead with their pre-season programme, starting at York tomorrow night and a trip to Germany next week.