Peter Beardsley is under investigation for alleged racism and bullying in his role as Newcastle United’s under-23 coach, after complaints were made against him by players in the squad.

The principal allegations against the 56-year-old former England and Liverpool player are understood to have been made by the winger Yasin Ben El-Mhanni , who complained to the club at the weekend. Beardsley was then called to attend a meeting on Monday with the Newcastle managing director, Lee Charnley, and the head of safeguarding, Steve Swinyard, at St James’ Park, at which the complaints were first discussed.

He reported as normal for coaching duties at the training centre in Benton on Tuesday but was asked to go to the stadium for a further meeting with Charnley. By then five further players are understood to have made statements which supported El-Mhanni’s complaints, and the decision was taken to have a formal investigation.

Newcastle issued a statement on Tuesday afternoon confirming that, while Beardsley has not been suspended, he will be absent from the club while the complaints made against him are investigated:

“After discussions with Peter Beardsley this morning it has been agreed that he will take a period of leave, to commence immediately, whilst the club conducts its investigation into allegations made against him,” the statement said.

Farleys, a firm of solicitors acting for Beardsley, issued a statement at the same time, saying he “categorically denies” the allegations of “unfair treatment” which have been made, and condemning media reports as inaccurate.

“Peter Beardsley is aware of inaccurate media reports which result from unauthorised leaks,” the statement from Farleys said. “Allegations of unfair treatment have been made, which are currently being investigated. Peter Beardsley categorically denies the allegations. It is hoped the investigation will conclude quickly. Peter Beardsley will not be making any further comment at the present time and until investigations conclude. Peter respectfully request [sic] that his privacy and that of his family is respected.”

Beardsley is considered one of the greatest players in Newcastle’s history and is celebrated in the club’s hall of fame, having played 326 times, scoring 119 goals, in two spells during memorable periods of ascendancy at St James’ Park. During the first, from 1983-87, he starred as a striker in the team which won promotion to the old First Division, alongside Kevin Keegan, Chris Waddle and Terry McDermott, before he was signed by Kenny Dalglish to play for Liverpool for £1.9m. Keegan, as Newcastle’s manager, brought him back to the club in 1993, where Beardsley played alongside strikers including Les Ferdinand and Alan Shearer in the teams which finished second in the Premier League in 1996 and 1997. He played 59 times for England, between 1986 and 1996.

Beardsley is serving his second stint on the coaching staff at Newcastle, having rejoined the club as an academy coach in 2009. In 2003, during his previous spell, he was cleared by a Premier League investigation after complaints of bullying were made against him.

El-Mhanni, 22, a winger born in London to parents from Morocco, signed for Newcastle in the summer of 2016. He first found fame demonstrating his ball skills in online videos, which led to work filming commercials, before spending time with Barnet’s academy in his late teens. He then played non-league football for Farnborough Town, Aldershot and Lewes, before signing for Newcastle. He made his first team debut a year ago in Newcastle’s 3-1 home victory in the FA Cup third round against Birmingham City.

El-Mhanni’s agent, Godfrey Torto, did not respond to a request from the Guardian for comment on the allegations. Newcastle said it would be “inappropriate for the club to comment further until the conclusion of the investigation.”