Portsmouth are facing a winding-up order from Her Majesty's Revenue and Customs, according to the administrator of the club's parent company.
Pompey, who have been blighted with financial problems in recent years, reportedly owe HMRC an unpaid PAYE bill of £1.6million, with Andrew Andronikou, of Convers Sports Initiatives, which owns the npower Championship club, describing the situation as "extremely serious".
"The club effectively ran out of cash at the end of December," he told Sunday's Observer. "We're under extreme pressure to find a buyer and time is against us.
"The issuing of the petition effectively means the club loses its ability to use its bank accounts. But we've made other provisions.
"We're not fazed or worried by it.
"The club's debts are not significant, we haven't got millions and millions of liabilities.
"We pretty much have two months' PAYE outstanding. We're waiting to see what the Revenue will do. They will probably advertise the petition [in the London Gazette] next week. I think there is a hearing date at the end of February.
"We need to focus on finding a buyer to completing a transaction to raise cash. In terms of working capital and cash it's only going to come from two sources: a buyer or player sales. We're working on both."