Leeds chairman Ken Bates confirmed his reputation as football's wheeler-dealer supreme by yesterday putting the club into administration and immediately forming a new company to buy it back again.

The move, for an undisclosed fee, wipes out a substantial chunk of Leeds' £35m debt and leaves Bates and his Swiss backers, Forward Sports Fund, in charge of the club and remaining assets.

The Football League have imposed the statutory ten-point deduction for going into administration, which confirms Leeds' relegation to League One, but with the club all but demoted anyway it means they will start next season with a clean slate.

Bates refused to shoulder any of the blame for Leeds' predicament, and in a statement criticised the club's previous regimes.

He said: ''The action taken brings to an end the financial legacy left by others that we have spent millions of pounds trying to settle.

''But the important thing now is not to view this as the end, but the beginning of a new era.''

Bates used finance companies based in Switzerland and the British Virgin Islands (BVI) to provide investment for his initial takeover of Leeds.

In his statement Bates said three companies, Astor Investment Holdings, Krato Trust and Forward Sports Fund, ''will collectively lose in excess of £22m''.

However, despite being leading creditors, they should not lose out too much as Forward Sports Fund will own the shares of the new company, Leeds United Football Club Limited, and it is also thought that BVI-registered Astor Investment have a stake in Forward Sports Fund.

In reality the biggest loser could be the taxman, who was pushing for a debt of around £5m to be paid.

Bates added: ''The financial burden of the past finally pushed the club into administration following the issuing of a winding-up petition by HM Revenue & Customs, who will be one of the company's major creditors.''

According to a leading expert in football finance, Bates has operated within the rules governing companies and insolvency. He said: ''It may sound immoral to put a club into administration to wipe out the debts and then buy it back, but it is entirely legal.''

As club chairman, Bates was in a position to choose the club's administrators, KPMG, who immediately agreed to sell Leeds back to the newly-formed company with Bates, chief executive Shaun Harvey and director Mark Taylor appointed as the new company's directors.

The deal, however, is subject to approval by creditors, at a meeting later this month, and by the Football League.

Bates said he was now looking for ''serious investors'' to come forward.

He added: ''The shares in Leeds United Football Club Limited are owned by Forward Sports Fund who would welcome serious investors to help make this club financially strong again so that we can mount a challenge to firstly gain promotion from League One and ultimately arrive back in the FA Premiership.

''Since January 2005 we have sought additional investment and have followed up every approach received but refused to deal with unnamed consortiums represented by third parties, if indeed they ever existed.

''To avoid time-wasters we have always required proof of funds first, whereupon they often disappear.''

Bates also called for Leeds fans to get behind the club.

He added: ''It is my intention to contact all the club's members to tell them of our plans going forward and season tickets will soon be available.

''The club are staying at Elland Road and we must unite together behind the club and take on all those in front of us.''

The sale of the club is subject to approval by creditors, who will meet before the end of May to consider a Company Voluntary Agreement, whereby they would forgo some of their debt. The Football League would then need to approve the sale.

A statement from administrators KPMG revealed Customs recently issued a winding-up petition for approximately £5m and had this debt not been paid by June 25, the club may have been forced into liquidation.

Football League communications director John Nagle confirmed the immediate points deduction ahead of this weekend's final game of the season against Derby.

Nagle said: ''Given the recent reduction in the numbers of clubs resorting to insolvency proceedings, it is disappointing Leeds United have had to seek the protection of an administration order.''

Nagle said Leeds would have to settle any debts to other clubs, football bodies and to players.