Dave King has warned that without significant fresh investment he fears Rangers will not be in a position to challenge Celtic again for the best part of a decade.
The former Ibrox director believes that the club needs a "once-off financial boost" that cannot be generated from the current income streams.
King's comments came as he urged supporters to pool their season-ticket money into a trust fund and use their influence to campaign for their voice to be heard in the boardroom. King believes that the current directors will not allow him to invest in a fresh share issue, and that instead the club will be funded by season-ticket sales and commercial revenue, which would necessitate budget cuts.
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"My assessment is that the business is not commercially sustainable in the short term and hence requires a level of soft investment," King said. "Any club must, over the long term, operate within its means, but in the short-term Rangers needs a significant once-off financial boost that cannot be met from the current revenue stream.
"Without this, we will not get back to where we should be. If we cut our costs to suit our present income, we will remain a small club and Celtic will shoot through 10 in a row - and beyond - while we slug it out for the minor places. That is not the Rangers that I grew up with and not the Rangers that we should be passing down to our children and grandchildren."
King also said that he believes the Rangers fans should continue to make demands of the board, including revealing the identities of shareholders such as Blue Pitch Holdings and Margarita, and for full disclosure of the finances. He accused the current directors of taking the fans' commitment for granted.
"The fact that it believes it can proceed as it is doing without financial transparency makes two major statements about the board's thinking," King said. "First, they have correctly understood the fierce and unbending loyalty [of the] fans.
"Secondly, they have seriously misunderstood this loyalty as being something they can take for granted and offer nothing in return. We shouldn't allow that to continue."