Former Arsenal vice-chairman David Dein believes the club will be "left behind" without new investment.
Dein resigned from the Arsenal board in April
Dein sold his 14.5% stake in the club to Alisher Usmanov for £75m and is now heading the Red & White Holdings Consortium co-owned by the Russian.
And Dein told the News of the World: "Quite frankly it has become a struggle to finish fourth.
"The club has to accept they need a huge injection of money. I'm afraid we're going to get left behind."
We don't see a reason for further investment
Arsenal managing director Keith Edelman
Dein left the Arsenal board in April after it failed to back his proposals that American Stanley Kroenke take control of the club.
Despite being made chairman of Red & White Holdings Consortium Dein claims there is "no current intention" to mount a takeover bid.
But he said: "I've not lost my passion for the club. My ambition remains to play an active role in Arsenal again."
And he believes that the board at the club need to look long-term if they are to ensure Arsenal do not fall behind their major rivals.
"Arsenal say they are in great shape today but we're not talking about today, we're talking about the future.
"Football has moved on massively in the last few years and it will move on again in a major way in a short period of time."
However, Arsenal's managing director Keith Edelman says the club do not need foreign investment and are well-placed to fend off any takeover bid.
Edelman said: "The current shareholders on the board control over 45% of shares and we believe the way the club is being run and the financial strength of the club will come through."
"The club is in a very good position, and the stadium is producing very large cash balances for us."
He told BBC Radio 5live: "We can support Arsene in anything he wants to do in developing the team or the squad, so we don't see a reason for further investment."
Edelman added that he hopes Gunners boss Wenger will commit his long-term future to the club and Dein, who had a close relationship with the Frenchman, is also keen for him to stay on.
What is happening (in the boardroom) is nothing to do with me
"I have maintained my close friendship with Arsene," Dein said. "I believe our professional partnership over many years was highly successful and beneficial for the club we both love.
"I hope it can be resumed. Meanwhile, I want Arsene to continue as manager and, indeed, I have encouraged him to sign a new contract."
And the Gunners boss has moved to distance himself from the boardroom activity at the club.
Wenger said: "What is happening (in the boardroom) is nothing to do with me.
"If I want to buy a player today then I have money available. We're doing it our way and are happy with that."
Wenger suggests that Arsenal do not need major investment to compete at the highest level, despite rivals Manchester United, Chelsea and Liverpool outspending them this summer.
And the Frenchman does not share Dein's concerns over the club's ability to compete in the Premier League and Champions League.
He insisted: "Maybe I'll need money in four, five or six years but that will depend on how much money the other clubs have and what the average salary is.
"I believe I can compete and be successful because I have a team that can win the Premier League and do well in the Champions League. That's why I'm here.
"There are many ways to work in the game. We buy good players when they come on to the market, but generally we have gone for a different solution and we will continue to do that.
"It's my decision to take this route."