Rangers are on the verge of going into liquidation after Her Majesty's Revenue and Customs told the club that they will not vote in favour of a Company Voluntary Arrangement.
HMRC's decision to reject the CVA means the club is likely to be forced into liquidation, forcing Charles Green, head of the Sevco consortium looking to buy the club, to form a new company.
The club over more than £21million to HMRC and the decision to reject the CVA allows them to pursue individuals for the debt.
"A liquidation provides the best opportunity to protect taxpayers, by allowing the potential investigation and pursuit of possible claims against those responsible for the company's financial affairs in recent years," a statement from HMRC read.
"A CVA would restrict the scope of such action.
"Moreover the liquidation route does not prejudice the proposed sale of the club. This sale can take place either through a CVA or a liquidation.
"So the sale is not being undermined, it simply takes a different route.
"Liquidation will enable a sale of the football assets to be made to a new company, thereby ensuring that football will continue at Ibrox.
"It also means that the new company will be free from claims or litigation in a way which would not be achievable with a CVA.
"Rangers can make a fresh start."
Green had proposed to help Rangers exit administration via a company voluntary arrangement, which would give creditors nine pence in the pound, but he now faces the prospect of having to try to but the club's assets and for a "newco".
"I am hugely disappointed by the decision of HMRC not to support the CVA proposal and that disappointment will be felt acutely by Rangers fans across the world," Green said in a statement.
"I do not see what benefit will be achieved by this decision.
"I can understand HMRC deciding that football clubs which do not pay their taxes need to be punished, but by effectively banning Rangers from Europe for three years all that will happen is that there will be less revenue generated by the club and consequently less money paid over to the taxman.
"The solemn promise I can make to Rangers fans today is that this club will continue as Rangers Football Club and will continue to play at Ibrox Stadium."
The new company will have to apply to the SPL to be allowed to play in the competition with club ultimately deciding their fate.
"We will be liaising with the football authorities at the earliest opportunity to establish our position regarding the SPL," Green added.
"I, along with my investors who believe that Rangers can have a bright future, will fight tooth and nail to ensure the club recovers from this catastrophic phase in its proud history.
"The fans deserve better and we will work tirelessly to realise their ambitions."