Albion chairman Dick Knight today revealed the shocking price still being paid by the club for the controversial sale of the Goldstone by the previous owners eight years ago.

The Seagulls have been warned by their auditors they face a hefty bill from the taxman arising from the sale of their former home if their new stadium at Falmer is rejected by Deputy Prime Minister John Prescott.

They have set aside £347,000 in the annual accounts, which show overall losses have more than doubled to a whopping £891,000 for the year ending June 2003 when they were relegated from the First Division.

The sale of the Goldstone in 1996 by Knight's predecessor Bill Archer left Albion liable for a Capital Gains tax charge. The new Board under Knight claimed roll-over tax relief, setting the costs of developing Withdean against the gain.

Although they were entitled to the relief, it does not entirely extinguish their tax liability and the relief is time limited.

The delay in resolving the Falmer planning application could mean the Inland Revenue will demand payment and Albion will almost certainly have to cough up if Prescott's verdict on the Public Inquiry into the new stadium goes against them.

Knight said: "It is bitterly ironic that, even after eight battling years, the sale of the Goldstone could come back to haunt this club. We will fight on and the message needs to go out to John Prescott.

"He must be in no doubt that the future of the Albion is in his hands. This club cannot survive indefinitely without our new stadium."

Albion's losses rocketed by £534,000 compared with the year ending June 2002. Overall income fell, in spite of promotion to Division One.

A further £267,000 was written off against the costs of developing Withdean Stadium and the club spent another £890,000 on the Falmer planning application and Public Inquiry, increasing the total spent on the scheme to £2.1 million.

Although Albion were playing against bigger clubs in the First Division, average attendances at Withdean were limited to 6,650, a tiny rise generating extra gate receipts of just £37,000 compared with the previous season in Division Two.

The problems caused by the restricted capacity at Withdean were made worse by dramatic losses in income following the collapse of ITV Digital and the re-negotiation of the Football League website deal with Premium TV.

Despite playing in Division One, overall turnover dropped by £113,000 to £4.77 million.

Knight said: "The figures demonstrate the stark reality of playing at Withdean. We entertained some of the largest clubs in the country in Division One, but we could not get any more people in to see them.

"Our gates were the same in Division Three. It is a lost opportunity and just shows how damaging this long, drawn-out fight for our new stadium is."

The figures will cause concern to supporters about the chances of surviving in Division One next season if Albion are promoted via the play-offs.

Martin Perry, Albion's chief executive, said: "At the Public Inquiry a number of objectors said that we should stay at Withdean. These figures show just how flawed that argument is.

"We are struggling to increase the capacity by just 2,000 more seats. To increase the capacity to a level where the club is a viable entity at Withdean is an impossible task."