Rangers chairman expects Whyte decision by Monday

Johnston, who believes venture capitalist Whyte's interest in Rangers has "substance and security" in financial terms, made no attempt to hide his dismay yesterday when the club's interim accounts revealed the 2.8m liability for a discounted option scheme related to player payments from 1999 to 2003. This is separate to the ongoing HMRC investigation into offshore payments made to Rangers players through a remuneration trust operated by one of current owner Sir David Murray's companies.

Johnston vividly described that case, which Rangers are contesting amid speculation they could face charges in excess of 30m, as "a gorilla in the room and you don't know what its appetite is". A deadline of 31 March for Whyte to make an offer for Rangers, set by Murray International Holdings, has been extended while the 39-year-old considers the impact of the unexpected 2.8m charge.

Johnston, who held talks with Whyte on Thursday along with other representatives of the Rangers board, admits to continuing uncertainty over whether a formal bid will be forthcoming.

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"There are differing views among our board over whether it will happen," said Johnston. "The validity will be determined in the next couple of days. Murray had imposed a time limit of 31 March, but we agreed that, given certain circumstances, there was room for a wee bit of flexibility.

"But only a couple of days. It depends if you count Saturday and Sunday as working days, but we are talking in that short timescale. If you are asking if I expect the deal to be done or withdrawn by Monday, that is exactly the scenario I'm expecting.

"The 2.8m payment will have to be worked out, but I don't think it is a deal-breaker. I'm frustrated by it for a lot of reasons. I don't like it, it wasn't in any plan, it wasn't in our budgets or anything that we have been trying to do. We have a very disciplined approach to what we do right now and I didn't like that appearing over the horizon suddenly.

"It relates to more than two or three players, but it relates to an issue ten or 11 years ago. As the Americans say, this one came right out of left-field. It really, really is frustrating. No-one knew about it a couple of months ago and let me put on record if we did know about it we would have had to put it in our annual report and take liability for it in the accounts.

"These were schemes that abounded ten, 11, 12 years ago. I don't know the context of doing it. The reason it has come home to roost right now is as a result of another tax case which set a precedent and allowed HMRC to come back and visit us. The two HMRC cases involving us are entirely different. The 2.8m figure has come out during Craig Whyte's due diligence. The larger case has also been addressed significantly by him. He is very aware of it and it hasn't scared him off."

Johnston was consistently dismissive of the previous mooted takeover of Rangers, from former Northampton Town chairman Andrew Ellis, which failed to materialise last year. Despite Ellis' involvement in the Whyte bid, which would see him take a 25 per cent share, Johnston views it as having far greater credibility.

"I'm certainly less sceptical this time," said Johnston. "The amount of money being spent on due diligence, albeit it went on too long, and his continued commitment of time, effort and money spent to advance discussions have been significant.

"His willingness to engage has been very different. In the talk over funds with Murray, it has been reported to me that there is a lot more security on that front. You have to go through the chronology of what is happening here.

"When Craig indicated he wanted to acquire the majority shareholding back in November, there was lot of nonsense leaked about the deal being done by Christmas.

"When it appeared that this bid had a lot more substance to it, as a board we prepared a briefing for Murray with respect to what we thought was the expectation and requirement for a takeover. We are not a party to the discussion between Murray and Whyte. We have been engineering and focusing on the club. Once it looked as if Murray, the bank and Craig Whyte were close to a deal and satisfaction with respect to the proof of funds, then we have been active, too.

"We are the commodity and while Murray, the bank and Craig Whyte are well represented at the meetings, we are representative of hundreds of thousands of fans and stakeholders.

Johnston added: "Craig is a very bright businessman. He keeps his cards close to his chest. I would say he is enthusiastic and aspirational (about Rangers], but also realistic."

What happens next

If Craig Whyte makes an offer

The venture capitalist will only lodge a formal offer once he has agreed terms over the sale, so it is unlikely there would be any further haggling. The sale of the club should then proceed at last.

If Whyte ends his interest

Rangers would then continue to operate along current lines, with no prospect of new investment for the first-team squad. There is no other potential bidder waiting to step in should Whyte take cold feet.

If Whyte needs more time

This is a potential scenario if both sides cannot reach agreement on what happens if HMRC land Rangers with a tax bill upwards of 20m. The potential size of this variable, and who would pick up the tab, remains the single biggest obstacle to a watertight agreement over the sale of Rangers. With a judgment not due until possibly as late as November, the whole saga could drag on for some time yet.

If Whyte pulls out and Rangers land a massive tax bill

The doomsday scenario at Ibrox. As chairman Alastair Johnston had to admit yesterday, Rangers have no means of paying such a bill. But it might not happen - Rangers are vigorously defending the case.