pressure on Celtic's directors over the lack of funds available for manager Martin O'Neill to strengthen his squad will increase as The Herald can reveal that much of the (pounds) 22.5m raised by last summer's share flotation was used to repay a bank loan.

The manager has spent a net (pounds) 5.15m on new signings this season when the flotation, the third in six years, was sold to the public on the grounds that they would be providing transfer funds for O'Neill and helping to build a badly-needed new training complex to replace the antiquated facilities at Barrowfield.

Some (pounds) 15m of the money raised was apparently used to repay a loan from the Co-operative Bank and, although a further (pounds) 4.5m was subsequently borrowed, it has been swallowed up elsewhere. O'Neill is now trying to bolster his squad, which is four players down from this time last year, with loan signings.

This news, coming soon after O'Neill openly revealed that the board had not approached him about an extension to his current contract, which expires in June, 2003 and that he would not dread an approach from Manchester United, is bound to fuel uncertainty about his long-term future.

The man, widely regarded by supporters as the saviour of the club, is hungry for success and openly frustrated at his inability to improve the areas he has identified as being insufficient to deal with the demands of the Champions League. Celtic won five European ties this season but yet again exited the bigger stage O'Neill and the fans crave before Christmas following the UEFA Cup defeat by Valencia.

Celtic's directors last night refused to comment on how the share issue money was utilised, citing legal reasons as they await the publication of their half-yearly accounts next month.

A recent report claiming that majority shareholder Dermot Desmond is preparing to sell up at Parkhead in order to buy into Manchester United along with fellow Irishmen J P McManus and John Magnier was unsettling enough for supporters.

The suggestion that Desmond, the man chiefly responsible for O'Neill's appointment, planned to take his manager with him was even worse. Desmond, who effectively makes all major decisions in the boardroom, has lost (pounds) 7.5m on his shareholding in Celtic, rendering unlikely further investment, and, therefore, increased spending power for the ambitious O'Neill.