THEY are down, but not out. Saints fans now know that next season their heroes will be playing at their lowest level for nearly half a century.

All that remains to be decided is whether they will start their League One campaign in August on minus ten points.

The Daily Echo understands that Saints will lodge an appeal against the decision within the next seven days, partly to give any potential new owners the option to continue down the legal route if they chose.

However, club bosses admit the process will be lengthy and it is far from guaranteed to being them the result they crave.

The Football League imposed the penalty having investigated Saints’ finances since their holding company, Southampton Leisure Holdings plc, went into administration last month.

Saints argued that because the club itself is not in administration they should avoid the mandatory points penalty, but the League yesterday decided the ten-point deduction stands after its inquiry ruled that the club and holding company were “inextricably linked”.

The League even accused holding company administrator Mark Fry of withdrawing co-operation from the probe.

Last night a furious Mr Fry said: n He did not believe the correct decision had been reached by the League.

n The club will consult with its lawyers but will almost certainly appeal.

n The club were only given a five minute warning that the announcement was about to be made in a phone call to finance director Dave Jones.

n Accusations that they did not co-operate were not true because the investigation went outside the scope agreed at the outset.

He told the Daily Echo: “I am extremely disappointed in the first instance.

“I would like to make it clear that the football club got about a five minute warning from the Football League that this announcement was about to made so the football club had no chance to advise its staff or players or tell the fans in advance of the Football League.

“Indeed, it goes further than that to say that the football club was not even aware that the investigation had concluded so there was no opportunity to have any input on the report that was submitted by the forensic accountants.

“We can’t comment on whether it was factually correct in terms of the information they relayed to the Football League.

“Overall, I would express real shock and disappointment on behalf of the holding company that has the football club as an asset and in terms of the football club itself.”

If Saints manage to win their remaining games and finish above the Coca Cola Championship bottom three, they will be hit with the ten point fine this season and relegated immediately.

If they drop down to League One (the old Third Division) as a result of their on-field failings, the ten points will be docked at the start of next season, making the prospect of an immediate return to the Championship much harder.

Football League chairman Lord Mawhinney said: “I have sympathy for the fans but the fans know as well as the rest of us that this has not been a shining example of football management.

“We have had changes and tension at board level and so the fans have had a difficult time.

“I can’t imagine there is a Southampton fan in the world who welcomes this decision but the job of the Football League board is to protect the integrity of the competition and that is what we have done.”

Saints’ bank Barclays refused to comment on whether it would have acted differently if it had known the club would be hit with a ten point deduction for going into administration.

It is understood the financial giant took legal advice about the likely outcome for Saints if the club was forced to call in the administrators, which suggested they could escape a sanction.

Saints’ breaching its £4m overdraft with Barclays, which had been cut from £5m at the start of the season, was a major factor in its financial collapse.

City leaders reacted with dismay to the ten-point deduction. Southampton City Council deputy leader Royston Smith said: “Of course the news is very disappointing.

“Whenever Southampton Football Club does well people have a collective spring in their step and when it does not do well it impacts on the feelgood factor in the city.

“Certain relegation is going to be very disappointing for everyone in Southampton.”

Cllr Smith added that he would back any appeal lodged by Saints against the decision.

John Denham, MP for Southampton Itchen and a Saints fan, said: “It is devastating news, especially coming just two days before the club was going to launch one last effort to get the points needed to stay up.

“It seems unfair – the rules are designed to stop clubs walking away from their financial commitments but there was never any doubt that Saints would have to pay off their debts.

“This city has enough supporters and people who want to watch first class football that the club is going to be an attractive place to invest in.

“Relegation is a blow but the message must be that we will bounce back. I would certainly back any appeal lodged by Saints.”

Romsey MP Sandra Gidley added: “Although these rules were probably dreamed up for a very good reason there is something wrong with the system when a club loses points for matters not related to football.

“Does it pass the fairness test? The answer is no.

“It is absolutely right that Saints should appeal this decision and I would be happy to support them in any way possible.”