FORMER chairman George Reynolds said last night that he would rather see Darlington Football Club close than accept a last ditch rescue deal.

His defiant comments came shortly after administrators revealed they had exchanged contracts with the Sterling Consortium for the sale of the business and assets of the 121-year-old club.

The finance group, which holds a mortgage on the Reynolds Arena, is the sole bidder seeking to bring Darlington out of administration.

But the deal can only be accepted if the creditors, including George Reynolds, agree. Mr Reynolds claimed that Sterling had valued the stadium at £2.5m - a price tag he would not consider.

"I love the club very much and it would grieve me to do it, but I have no alternative," he said.

Despite Mr Reynolds' comments, Quakers' fans hailed Sterling's decision to try to secure some sort of a future for Darlington.

The club would be safeguarded from the immediate threat of extinction if the creditors accept a company voluntary arrangement (CVA) deal, backed by Sterling, at their next meeting.

The CVA will offer them a small fraction of what they are owed, but Sterling's package is the only credible deal on the table.

Mr Reynolds is, on paper, the largest unsecured creditor, claiming to be owed £20m, despite the last audited accounts showing a figure of £5.6m. He had previously declared that he was prepared to accept ten pence for every pound he is owed to walk away from the club.

But last night he said: "There is no way I'm going to settle for ten pence in the pound under these circumstances. They (Sterling) are going to have to come up with a solution, otherwise the club will close."

Sterling will make a full announcement on Monday - and that is likely to include an indication that it wants to work alongside a consortium of local businessmen - with Darlington Supporters' Trust - in running the club.