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Peter Pannu has opened up about the extent of Birmingham City’s financial woes.

And he admitted for the first time that he was prepared to sell Jack Butland and possibly other stars in the January transfer window to stop Blues from going under.

Debts racked up by parent company Birmingham International Holdings Limited (BIHL), loss of revenue due to relegation and Carson Yeung’s assets freeze have contributed to Blues monetary mess.

Despite the sale of some £35 million worth of talent since Blues lost Premier League status in 2011 three months after winning the Carling Cup and swingeing reductions in costs and salaries, the club are in a dire state.

In a frank and forthright interview with the Birmingham Mail, Pannu warned: “If I allow this club to go into administration, I think I will never [be able to] step foot in Birmingham city. Never.

“And I am not going to allow that to happen.

“If I do annoy the fans and I do dispose of players, it will be to keep the club afloat.

“I will be abrogating my responsibility to the club, to the fans if I allow that [administration].

“And that’s not an excuse for me to dispose of players, I just need to do what I have to do.”

England cap Butland is Blues most saleable asset. And Pannu admitted he could go, and the drain of Nikola Zigic’s £50,000-a-week plus wages was too much.

“I can’t say that we are in a very wonderful situation, I would be lying if I said that.

“This is a very tricky question [player sales].

“What I can say is that - and I might be blasted for this by the fans - but no one is for sale and everyone is available. As in any club.

“Give me a £15 million offer for Jack Butland, can I say no?

“I have rejected £6 million from Southampton [in the summer] but I rejected it when our finances were OK.

“As the time is ticking, I might not be able to reject it if I get something similar.”

“I do have a responsibility to keep the club running,” continued Pannu.

“Many eminent managers, players have said it umpteen times, that no one is bigger than the club.

“My top priority now - and if I do offend anyone, I care not - is to make sure this clubs stays afloat.

“I will do what I have to do and buy some time to ensure that I can hand this club over to good people who can take us to the next level.

“Ziggy obviously is earning a lot of money here. He’s a very good guy, a gentleman, a gentle giant and I have got lots of time for him.

“But I can’t shy away from the fact that we are paying a lot of money which I’m sure we can’t [afford to]. He realises that.

“We might have to consider his position in January.

“There are other players who are earning a lot of money, at least four, five players I’d hope weren’t earning that much.

“It might be the case that if opportunities arise I will have to look at that.”

“The principle is to keep the club going.

“I can’t let this club run to the ground. I need some time to ensure I can pass it on to good people who can take us to the next level,” Pannu added.

Pannu, chief of parent company BIHL, who own 96 per cent of Blues, said Lee Clark would not be able to make any cash signings in January, but if finances could be juggled sufficiently - dependent on what offers they received - incoming loans were feasible.

Liverpool, Everton, Spurs and West Ham United have all been eyeing Butland.

Pannu pointed out that a player's head was often also easily turned - citing the raft of knocking on his door that took place after relegation.

“Let’s use Butland as an example," said Pannu.

"I understand there are talks with Liverpool, I understand that Everton might be interested, Southampton gave me an offer in the past, I know not whether they want him.

“His is a phenomenal player and let’s move this from another angle.

“For example, if Liverpool come in for Butland, do you not think Butland wouldn’t want to go there?

“Even if Liverpool came to me with £4 million, I’m sure if his agent is doing a proper job he will blow my door down and say he wants the Liverpool opportunity.

“Remember when we were relegated, I had 50 doors changed.

“We have to look at things from various angles, not just purely the financial side of things.

“We have got players who are human and humans have needs, then we have got their agents on top who want to do the best for their players."

“Now it might not be good for us, but it might not necessarily be bad," Pannu added.

“So using Butland again, if I can translate that into £6 million coming up in front, then the only priority I would have to off-load people would perhaps be Zigic.

“Zigic needs to go out and showcase himself. And if a new club likes him, there might be a chance that they will be permanent transfer.

“And under these circumstances, I might not need to off-load anyone else and then I might have some funds to bring in on-loan strikers for us."

Read the second part of the interview at 9am when Peter Pannu discusses the takeover in depth...