BURNLEY are losing £1million a year, shareholders were told last night.

The club's AGM heard Barry Kilby insist that the controversial sale of Turf Moor and Gawthorpe training ground, which will generate £3million when ownership transfers to a company owned by the chairman next week, clears all external debts.

However, after recently revealing that average gates of around 16,000 were required to break even, Kilby has now uncovered the true extent of the club's current financial plight as it fights to compete with bigger Championship clubs.

"The money we earned from the sales of Robbie Blake and Richard Chaplow earlier this year was just short of £3m," he said.

"We spent some on Ade Akinbiyi and James O'Connor, but basically all the money we have goes into the bank account.

"We are losing £20,000 per week and that is with a players' wage bill that is the 19th highest in the Championship.

"We are competing with clubs who regularly take £250,000 more every game than us so the money will fund the losses, certainly over the next year.

"But there is a red flag there because unless we can get income from a cup run, selling players or capital from somewhere else, we will lose that money every week in this division."

Around £1.6million in directors' loans will still remain once the 'sale and lease back' deal for the historic ground and training complex is finalised and wipes out all external debt.

Kilby, who reported a pre-tax profit in 2004/05 of £1.9m aided by those player sales, added: "We are inches away from the deal being concluded.

"Despite the influx of money from the player sales in January we decided the deal was still necessary and with Turf Moor being leased back to the club for 99 years everything had to be right. We expect it to be complete in the next week or so."