Leeds have revealed pre-tax losses of £49.5m for the year ending 30 June 2003, the highest ever figure for a British football club.
The club were already £78m in debt, but the record sum was reported in their annual results to the Stock Exchange on Tuesday.
Chairman professor John McKenzie has insisted the club does not need to sell any more players as a result.
And in a bid to turn the club's fortunes around, he has appointed former Chelsea chief executive Trevor Birch in a similar role at Elland Road.
Birch, who quit Stamford Bridge after Peter Kenyon's arrival from Manchester United, takes over on 1 November and is the first chief executive to take the reins at Leeds since 1999.
2002/03 RESULTS IN DETAIL
Operating loss of £25.4m
(excluding player transfers)
Wage bill up by £3m
Turnover down by 21%
Tangible assets down from £109m to £60m
Television/broadcasting income down by 36%
His arrival means McKenzie will move into a non-executive role as chairman, free to concentrate on resolving long-term finances at the club, which is currently second bottom of the Premiership.
"Rest assured I would not be taking the step that is of stepping back to be a non-executive chairman if I did not have the utmost confidence in Trevor Birch and the belief that Leeds United had not begun to turn the corner," McKenzie told Leeds' official website.
He added: "We have taken £20m of costs out of the business and have rebuilt the management team and as such it is now possible to begin to look forward with some confidence."
The sale of key players such as Rio Ferdinand, Jonathan Woodgate, Harry Kewell and Robbie Fowler - some for about half their original value - failed to stop the club's finances spiralling out of control.
In fact, despite seeing several players leave in the 12 months up to 30 June, Leeds' wages actually rose by £3m.
The club also made a loss of
£17m in player trading, while turnover fell by 21% to £64m, partly because of drops of 36%
and 9% in television and merchandising income respectively.
The period of accounts also included a spell of asset stripping, with Tuesday's
statement valuing the plc's assets at just over £60m, compared to over £109m a year earlier.
McKenzie's bid to cut costs has included a number of redundancies in a bid to save £5m annually.
But the one-off costs associated with redundancies and a pay-off to former manager Terry Venables cost the club £7.2m in the 12 months to 30 June.
McKenzie told BBC Radio Five Live: "We have
turned the corner and we are on our way back.
"There will be another opportunity for fans and others to invest in the
first part of next year.
"We will not sell a player unless they ask to go and that will only be when
the price is then right. The key is whether they want to go or not."
But McKenzie did also reveal that star striker Mark Viduka, arguably the club's biggest remaining asset on the field, was signed on a lease agreement from Celtic three years ago.
That means Leeds, who paid the Glasgow club £6m for his services three years ago, would only get a third of the fee if he was ever sold.
Leeds United Supporters' Trust spokesman John Boocock refused to blame McKenzie for Leeds' financial plight.
He said: "There has been a complete lack of planning as far
as the club is concerned.
"We have this unserviceable, unmanageable debt and if we
were making nuts and bolts the receivers would have been in called in by now."
Leeds University financial expert Dr Bill Gerrard does not share Professor McKenzie's optimism and said: "I am particularly concerned the key element that McKenzie has pushed is the
cost-cutting of £20m.
"Anyone can cut costs in a football club and get rid of players. But if you
get rid of your players, your performance on the pitch is going to decline.
"For McKenzie to claim that he is to going to produce break-even figures at
the operating level next year, on my calculations that means a reduction of
costs of £39m.
"To date he has reduced only £20m and look where the club are - second
bottom of the Premiership."