Hearts' financial problems have forced them to cancel the signing of Liverpool defender Danny Wilson, manager Gary Locke has confirmed.

Wilson, 21, signed a three-year deal with the Scottish Premier League club in May, having struggled to establish himself in the first team at Anfield.

Hearts went into administration on Wednesday with debts of £25 million, and have been banned by the SPL from registering new players after failing to pay a number of squad members their wages.

The administrators BDO made 14 office staff redundant on Thursday, and are cutting costs in an attempt to save the club, who will start next season with a 15-point deduction.

Locke told a press conference on Friday that, because Wilson's Liverpool contract does not expire until June 30, he is still technically their player, despite signing a deal with Hearts. It means that the defender will now be free to sign for another club.

"Danny Wilson is still a Liverpool player and because we have an embargo we now cannot sign him which is very unfortunate for me," Locke told STV.

Wilson, who signed a three-year contract on joining Liverpool from Rangers for £2 million in 2010, made just one Premier League start in his time at Anfield.

He played nine games for the club in total - the last of which was a League Cup tie at Brighton in September 2011.

The defender, who has played five times for Scotland, had temporary spells in the Championship with Blackpool and Bristol City before joining Hearts on loan in January.

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