THE future of Darlington Football Club was looking increasingly desperate last night after hours of negotiations to agree a rescue deal ended in stalemate.

Administrators Wilson Field admitted that the frustrating impasse meant the Quakers could be on the verge of closure after 121 years.

A day of talks involving former chairman George Reynolds and would-be owner the Sterling Consortium ended last night with no agreement being reached.

It led supporters to call on all parties to thrash out a settlement to save the club.

Sterling, the finance group that holds a mortgage on the Reynolds Arena, exchanged contracts for the sale of the business and assets of the club last Friday.

But the sale is subject to creditors' approval - and Mr Reynolds has insisted that he will reject a Sterling-backed company voluntary arrangement (CVA).

The Football League is also standing firmly behind its policy that all creditors must be satisfied with any deal to bring a club out of administration.

Joint administrator David Field said last night: "Everybody has their position, and if nobody moves from those positions, there is nothing else we can do.

"Liquidation is looking likely. There are still opportunities to resolve it, but we're trading at a loss and we can't carry on.

"If we get to the stage where we can't justify carrying on, then we will close it."

The Sterling deal would have offered creditors a small fraction of what they are owed and, if accepted, would have ensured the club's short-term survival.

But Mr Reynolds says the business has been undervalued. He said he would rather see the club fold than accept the terms of Sterling's proposal.

Mr Field said: "We have held further discussions with the purchaser and Mr Reynolds, and we will continue to have discussions."

The Football League has confirmed that it will not alter its insolvency policy for clubs in administration for Darlington's sake - to the fury of fans.

Peter Ashmore, secretary of Darlington Supporters' Trust, called for stronger support for one of the country's oldest clubs.

"It is time the League got off the fence and helped out lower league clubs," he said.

"Darlington's situation is a special case and requires the League to step in and ensure the club, with 121 years of history behind it, isn't allowed to fold.

"We would urge all parties involved in the on-going talks to thrash out a compromise deal to secure the club's future."

The Sterling bid is the only credible offer on the table. Sterling - made up of financiers Melvyn Laughton, Sean Verity and Stewart Davies - loaned £4m to Mr Reynolds to finish work on the stadium.

That loan was supported by a personal guarantee from the former chairman.

Sterling has since issued a bankruptcy petition against Mr Reynolds in respect of that guarantee.

The group was forced to launch a take-over bid to protect its substantial investment after no others emerged.

It is understood to be keen to work alongside a consortium of local businessmen in running the club, should the take-over go ahead.