“We understand that the football club is an intrinsic part of Scottish life. We are working with Rangers to look at a long-term sustainable solution to the issue of its debt. Things have calmed down a bit from early on in the week,” said a Lloyds Banking Group spokesman.

The borrowing bonanza extended to Murray Group companies lasted for more than a decade, with the levels of lending escalating year by year. And while the success of most of the conglomerate, through increased turnover and profit, sustained the group though the boom time, the harsher ­reality of the economic situation began to dawn on Murray International ­Holdings in late 2006.

In October 2000, the Murray empire was a diverse group of a dozen companies under the banner of the entrepreneurial Murray International Holdings. ­The turnover was £140 million,

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having dropped £49m from the ­previous year, and profits were only £346,000, down from £16m. Much of this related to the transfer of football players at Rangers FC under coach Dick Advocaat. But there was a special relationship between David Murray and the then Bank of Scotland managing director, Gavin Masterton.

Asked about the Rangers situation, Mr Masterton said last night: “I’m sorry, I’m not in a position to comment now. Its nine or 10 years ago since I was involved and a lot of water has gone under the bridge since then.”

One Lloyds insider said: “In the early days, money was thrown at Sir David Murray’s company because he was dynamic, astute and successful. He was one of Bank of Scotland’s favoured sons. But there needs to be different risk procedures in place now to deal with the changing environment.”

In his chairman’s statement in 2000, Mr Murray spoke of Bank of Scotland’s £20m investment to increase its equity stake in the group, with Mr Murray the main shareholder with 12 million shares. In reality, the business continued to flourish with access to large tranches of Bank of Scotland cash after Mr Masterton’s departure.

Rangers was demerged into a separate holding company and a £60m loan was given to the club in a loan note which was due in the event of sale of the Rangers.

In the early 2000s, the Murray group – helped largely by his metals businesses Murray International Metals, Premier Alloys, Forth Steel and Northern Steel Stocks – was successful, sharing in Bank of Scotland’s belief in the undervaluation of commercial property assets. Turnover rose by 12% to £143m, with profits up to £11m. But bank borrowing was rising fast, standing at £51m in 2001.

The group’s strategy of expansion in mining, metals and property was continuing with new facilities from Bank of Scotland. Mr Murray now had land banks beside the Edinburgh bypass, and in the centre, and in Leeds, and owned the Kingsgate Shopping Centre, Dunfermline. In 2002, Mr Murray announced that he was stepping down as chairman of Rangers after 14 years – only to return two years later, with minimal explanation for his change of heart.

By 2003, the group’s bank borrowing had jumped another £14m to £65.2m. In November 2003, Mr Murray was becoming concerned about the debt burden at Rangers, and some of the value was written off. After his return to Rangers in August 2004, the football club’s debt reached £73.9m, with Mr Murray underwriting £50m of this.

“We have undertaken a review of the group’s investment in the Murray Sports Group, the value of which is derived from the underlying value of Rangers,” said Mr Murray. “I have concluded that in line with many other companies and in accordance with Financial Reporting Standard 11, it would be appropriate to make an impairment adjustment of this asset as a result of the current downturn in the football market.”

Yet the bank borrowing was still heading upwards. In January 2003, with a turnover of £266m, there was a staggering £139m loan from the bank, up from £97m in 2002. In 2004, profits were up to £21.4m with a turnover of £249m,

Mr Murray then sold off the VIDA five-a-side business and took a 30% stake in the Alexander Dennis bus company. To fund this, Bank of Scotland increased its lending to the group and by 2005 they were borrowing £255m. Profits were still high, doubling to £37m, on a turnover of £369m.

By 2006, Murray Group was doing exceptionally well with seven years of growth, and still making acquisitions. Rangers were also doing better, playing in the Champions League, and a rights issue pumped in another £51m, bringing Rangers’ debt back to £23m. But the borrowing binge was beginning to hurt – the debt ratio was 62% – and needed to come down, although Murray Group’s level was still at £208.6m.

The hoped-for cutbacks simply weren’t happening. In 2007, while turnover was still rising to £451.7m, and profits had been posted from the 2005 sale of Murray International Metals for £118m, the group’s debts were £290m, supported by Bank of Scotland, which now owned 11.5% of the company. Murray International was changing its strategy to shift more towards property, outsourcing and asset management, although it was still making 60,000 tonnes of steel plate a year.

But the 2008 wipe-out in the property market has placed massive strain on the Rangers boss’s empire. Demand for steel has fallen away. He no longer has the spare capacity to soak up Rangers’ losses – and the bank, now owned by Lloyds Banking Group and reeling from colossal losses, has a different viewpoint about loss-making football teams.