Mike Ashley could sue Premier League over collapse of Saudi investment fund-led takeover of Newcastle

The Premier League is vulnerable to legal action from Mike Ashley for effectively derailing the Newcastle United takeover, intermediaries in the collapsed deal believe.

Those close to the process believe England's top tier is in an "impossible position" as chief executive Richard Masters comes under sustained pressure to explain why the league's directors and owners' test hit a four-month impasse.

The league has consistently maintained privately that it took an "objective" approach to the proposed £300 million deal, but the Saudi sovereign investment fund behind the takeover is said to feel the delay was a thinly-veiled attempt to make the takeover impossible. The Public Investment Fund (PIF)  eventually walked away after being unable to satisfy the league that Crown Prince Mohammed bin Salman was not involved.

Ashley remains desperate to revive the deal, but PIF would now consider returning to talks only in the unlikely event that the league provides written assurances that it was finally ready to let the deal go through.

As hopes fade, however, those closest to the negotiations say the other option is for Ashley to pursue a potential damages claim against the league, given he is said to have received assurances from it in April that there were "no red flags" to the proposed takeover.

It is an unprecedented situation for the Premier League, which neither passed nor failed the prospective buyers, but, with MPs and fans groups now demanding answers, Masters is under mounting pressure to explain on the record why the process was so drawn out. Those involved in the deal believe such a statement remains "hugely unlikely" to state on the record which way the process was heading due to the legal ramifications.

"It is becoming an impossible situation for the PL," said one source close to talks, who cited the case of BeIn, the Qatari broadcaster which was vehemently opposed to the deal due to Saudi Arabia's failure to prevent the BeOutQ piracy scandal.  "The league is desperate to hang on to keeping their process secret because they have Ashley's lawyers circling in one corner and BeIN Sports in the other."

PIF, Amanda Staveley and the Reuben Brothers withdrew their offer to buy the club on July 30, prompting thousands of fans, the Newcastle United Supporters' Trust (NUST), the Independent Football Ombudsman and at least 40 MPs to demand answers.

Ashley previously said he remains "100 per cent committed" to the sale, with the club's managing director, Lee Charnley, issuing a brief statement a day after the collapse of the takeover to suggest the deal may still be resurrected.

The Premier League has already offered independent arbitration, rejected by the bidders, who say their ownership structure - with the PIF an independent investment vehicle as set out in its charter - and business plan were clear.

There have been renegotiations over the sale price, which was just above £300m having originally been agreed at £340m before the coronavirus pandemic struck, but this was not a deal-breaker and relations between the bidders and Ashley remained good. The Premier League declined to comment.