The bulk of the former Thai prime minister's assets have been frozen, pending possible corruption charges, and City have reluctantly started to plan for life without him.

City's chief executive, Alistair Mackintosh, has embarked on a two-day trip to mainland Europe to speak to managerial candidates. With Mackintosh hoping to meet the Sevilla coach, Juande Ramos, and possibly going against Thaksin's wishes by approaching Sven-Goran Eriksson, sources close to Thaksin admitted the deal was "on the ropes". The billionaire was said to be determined to press ahead with his takeover but the Premier League's intervention might prevent him taking any role in the top division even if he were still in a financial position to proceed.

Every board member or controlling shareholder of a Premier League club must sign a "director's declaration" stating whether he or she has convictions for fraud, theft, corruption or associated offences. Clubs with a director carrying such convictions are debarred from competing in the league until the association with the individual is terminated.

Thaksin has been granted 60 days to present evidence to an anti-corruption committee in Thailand to prove that his wealth - principally generated from the £1bn tax-free sale to the Singapore government of his family's stake in the Thai-based Shin Corp telecoms group - has been earned legally. The committee will then refer its findings to Thailand's courts of justice.

If charges and a conviction were to follow, the Premier League would be forced to exercise its fit-and-proper-persons regulations for the first time. At their introduction in August 2004 the league's chief executive, Richard Scudamore, stated: "The fit-and-proper-persons test puts football club directors in the Premier League under a far more rigorous test than ordinary company law." The fact that Thaksin might already have completed his purchase of City would not prevent retrospective action by the Premier League.

Thaksin and his representatives spent yesterday in a series of top-level meetings to discuss the freezing of his bank balances and other financial assets, and a statement from his lawyer, Michael Goldberg, said the 57-year-old would "vigorously evaluate all international options to protect his rights and interests".

Thaksin was overthrown in a bloodless coup last year and is now living in London. "The junta is committed to finding means to circumvent any rule of law to persecute Dr Thaksin, his family, his friends and his business activities," Goldberg continued. "The junta's attacks on Dr Thaksin amount to an arbitrary interference with his privacy and his family, his private property, his business interests as well as his honour and reputation."

The implications for City are enormous and the club chairman, John Wardle, convened an emergency board meeting yesterday. The club's lawyers have asked Thaksin for written confirmation that he is in a position to proceed and Manchester city council, which owns the stadium, has become involved. "The perception of the club is one of drift," said the council leader, Sir Richard Leese. "The board ought to put a deadline on the takeover issue. It is reaching a stage where people should put up or shut up."

A difficult few days for City were exacerbated last night when the "They are out of order," said Allardyce. "This is a private matter, a confidential issue that should not have been made public. I'm flabbergasted and want the situation resolved."

The Guardian