CRAIG Whyte will not give up his position as preferred creditor with first claim on the assets of Rangers despite admitting he used more than £20 million of supporters' season ticket money to help complete his £1 takeover of Rangers.

Administrators are investigating whether his floating charge over assets such as Ibrox and Murray Park is valid as he did not use his own money, as he had asserted.

Whyte, now in Monaco, admitted on Tuesday that when he bought Sir David Murray's majority shareholding in Rangers in May 2011, he used money raised through selling off three seasons' tickets to Ticketus to pay off the £18m the club then owed to Lloyds Banking Group.

A close associate of Whyte has told The Herald that despite an "absolutely brutal public filleting", the Motherwell-born venture capitalist has no intention of walking away from Ibrox and intends to fight any attempts to prise away his hold over the assets.

Some observers believe his stance has sparked a battle for control of Rangers, stemming from the prospect of the club becoming more valuable free of debt if it emerges from administration and a more sellable commodity in the longer term.

Former club director Paul Murray met administrators on Friday to discuss his Blue Knights initiative to take control of the club, and it is known others have a keen interest.

However, Whyte believes his take-over deal remains legitimate. He points out he is underwriting the ticket agency's investment through his offshore company Liberty Capital and is "on the line" for £27.5m in guarantees and cash.

"If you are asking whether Craig Whyte will give up, the answer to that is no," said the associate. "He believed, and he still does, that what he has done is the right course of action and it will save Rangers."

Club sources fear the dispute over the validity of Whyte's security can only be resolved in the courts

and could lead to lengthy and costly legal challenges.

Whyte's hold over the club stops Ibrox and Murray Park being sold to clear potential debts of nearly £65m for the benefit of the tax man if Rangers went into liquidation. That would change if his security or floating charge inherited from the Lloyds Banking Group was deemed invalid. Rangers' tax debt includes a liability of £49m plus interest if they lose "the big tax case".

Former Rangers chairman Alastair Johnston wrote to the administrators, citing a written promise from Whyte, which said breaking the purchase terms would automatically extinguish the £18m Rangers debt which the financier took over from the bank. He believes an interpretation of the terms of the purchase agreement means the payment of the Rangers debt should not be secured against other assets, like future season ticket sales.

Whyte's associate told The Herald: "There are other people that need to be looked at. What I am suggesting is that anyone that thinks Craig Whyte was able to manoeuvre himself into the position he did, was able to do the deals he did on his own in isolation, without anyone else being involved or anyone else being aware, is kidding themselves.

"He is being described as such a deceitful crook and that his punishment should be that he should walk away and have a £27m bill for his trouble. It is kind of beyond the realms of reality."

An insolvency practitioner, experienced in dealing with handling football clubs in administration said: "To me it is quite simple. Mr Whyte has taken £24m out the club. Whether he is guaranteeing that money or not it doesn't matter. To me this means he has no right to that security over the assets."

A Rangers banking source told The Herald: "It is a matter for the authorities to investigate whether the security is valid. We think it will take the courts to decide the validity of the security."

A spokesman for the administrators said: "We are looking into all aspects of the validity of the transaction and the circumstances, so that would include the validity of the floating charge."