FORMER Rangers chairman Sir David Murray and current owner Craig Whyte face investigation into the financial meltdown that led to the club's demise.

The development came as the taxman rejected a company voluntary arrangement (CVA), meaning the club will go into liquidation within the next few days.

HM Revenue and Customs (HMRC) which was offered just £1.9 million of a debt perceived by the administrators to run to £21m initially, says placing the club in the hands of the liquidators will spark off a detailed independent investigation into the financial affairs of Rangers over the past two decades.

It confirmed the probe could lead to criminal or civil proceedings against directors involved with Rangers over that period.

The taxman appointed joint liquidators from BDO to investigate and wind up the 140-year-old club.

Under the microscope will be whether Whyte ran up debts while the club was effectively insolvent. They are also expected to examine whether the deal that saw Murray sell the club to Whyte for £1 in May last year was legal.

Whyte set up a deal to complete his purchase of the club to sell off the rights to three years of Rangers season tickets to London-based agency Ticketus to raise more than £20m and pay off the club's debt with Lloyds Banking Group.

Court papers show the administrators' legal advisers told Court of Session judge Lord Hodge they believed the Ticketus deal was illegal on the grounds it was indirectly providing financial assistance for the acquisition of Rangers' shares, contrary to the Companies Act 2006.

Insolvency experts also say directors can be found guilty of misfeasance by giving ownership to someone who was not a fit and proper person.

The probe is also expected to look at Rangers' use of Employee Benefit Trusts to pay dozens of players during Murray's ownership. HMRC issued a bill for unpaid tax on the schemes, believed to be in the region on £49m, including interest and penalties.

Rangers fought this through a First Tier Tax Tribunal which concluded in January and is due to issue its determination. It is believed the potential EBT debt faced by the Ibrox club may have been as high as £75m, including penalties and interest.

A Murray Group spokesman said: "This is a very sad day for Rangers but Murray Group and its employees will co-operate and assist fully with any investigation by HMRC or any other official body."

Charles Green, the Yorkshire-based businessman who heads the Sevco consortium which became the preferred bidder with an £8.5m loan to buy the club, said HMRC's position was "massively disappointing" and added: "I think to some extent we have been misled by HMRC."

But HMRC said: "A liquidation provides the best opportunity to protect taxpayers, by allowing the potential investigation and pursuit of possible claims against those responsible for the company's financial affairs in recent years."

HMRC also revealed it was not contesting Mr Green's purchase of the club and was not interested in forcing a fire sale of assets such as Ibrox and Murray Park as "the intention is not to wipe Rangers off the face of the map".

The administrators and Mr Green previously stated that should the CVA fail his offer goes into an "automatic mode" to carry out a newco switch at the Ibrox club, where all assets are sold to a new company for £5.5m. It has never been made clear whether this too is a loan.

But it emerged last night Mr Green may yet face a challenge in his attempts to purchase the business and assets, with three other "newco" offers expected.

Paul Clark, of administrators Duff & Phelps, said there was a full "fall-back plan and that is the sale of business and assets to the Charles Green consortium" and added: "There is no avenue for anyone else to come in at this stage."

The Professional Footballers' Association Scotland has suggested player contracts may not be transferrable to the newco as part of an asset sale which could mean they are able to walk away for nothing.

Mr Green claimed he was "confident" Rangers would be playing in the Scottish Premier League (SPL) next season, despite uncertainty over whether clubs will vote in favour of an application from a newco club.

But fans' groups said they were worried clubs will exile Rangers.

John MacMillan, general secretary of the Rangers Supporters' Association, said: "There is a feeling among a few of the clubs they should let Rangers sink. But if they don't let us into the SPL it is a disaster for Scottish football.

"The situation we are in is an embarrassment to the club in general and it's an embarrassment to the supporters. The bottom line is it has been caused by mismanagement over the last 10 years or so, and Craig Whyte made the situation 10 times worse."