• Club rebuilding following their recent relegation for financial problems • Ex-England all-rounder to take up role after upcoming Test series in India

Sir Ian Botham will lead Durham’s recovery from the off-field troubles that led to their enforced relegation last month with the former all-rounder poised to become the county’s chairman.

A £3.8m bailout by the England and Wales Cricket Board came with severe sanctions attached that mean the club will start next season in Division Two on minus 48 points to go with deductions in the one-day and Twenty20 competitions and the stripping of their Riverside Ground’s Test status.

The club, which had found itself unable to service £7.5m of debt, will at least begin the new campaign on something of an even keel financially after Durham County Council agreed to convert the £3.7m it was owed into shares a fortnight ago. A fresh approach off the field will still be required if greater revenues are to be generated and it is here where Botham’s appointment is hoped will provide a jolt.

The 60-year-old, who was on Thursday invited to take up the position vacated by Clive Leach at the end of the summer, will now form a new board of directors, drawing on contacts from the corporate world that have helped him to raise £25m for charity – most notably leukaemia research – over the past 30 years.

“I am very privileged to be invited to accept the role of chairman at Durham but it is important that we all recognise the size of the task ahead,” said Botham, who played for Durham in the twilight of his career when the county was awarded first-class status in 1992, and he still lives in the region.

“As someone who lives locally, it is an honour to have the opportunity to contribute to the club’s future, to look forward and to continue to produce the talent that will serve both the county and England well in the years ahead. We will work closely with the England and Wales Cricket Board and Durham County Council as we develop a plan to ensure continued success for this great club.”

Botham’s impending chairmanship has been welcomed by the club’s captain, Paul Collingwood, who told the Guardian: “Sir Ian is very much a proud man with roots in the north-east and an ex-player at the county too, so from my point of view it’s very positive. It’s exciting for the club moving forward and comes at a time when we need people like him who can help bring in revenue and help the business.

“You couldn’t get anyone bigger in the game of cricket to take up a role like that: everybody knows his name. A big part of the job will be galvanising people as part of the rebuilding process, which he will do. This is a huge positive for us.”

Despite finishing fourth in the top flight last summer, Collingwood’s side face an uphill struggle in Division Two given both the huge points deduction and the loss of Mark Stoneman and Scott Borthwick – two batsmen to have passed 1,000 runs in each of the past three seasons – following the pair’s dual move to Surrey.

The England players Ben Stokes and Mark Wood have signed new deals in recent weeks, however, and another plus comes with Keaton Jennings, the leading scorer in Division One last season, understood to have told the club he too will stay despite the four-year contract he signed in August including a relegation clause.