West Ham boss Gianfranco Zola told: 'There's no money to spend'

West Ham boss Gianfranco Zola was last night given a grim warning about the club's finances after its owners suffered a devastating financial blow.

Hammers chairman Bjorgolfur Gudmundsson was chairman and a major shareholder in Iceland's second biggest bank, Landsbanki, which was plunged into receivership yesterday.

It leaves Gudmundsson picking up the pieces of the bank's collapse as West Ham suffered another setback just weeks after the collapse of its shirt sponsors, XL, leaving them with a potential £5million shortfall.

West Ham are also locked in a legal battle with Sheffield United, who could stand to win £30m in compensation over the Carlos Tevez affair.

Zola was yesterday told by vice-chairman Asgeir Fridgeirsson there will be no new investment and he must sell before he can buy new players in the January window.

Fridgeirsson said: "Mr Gudmundsson has already put £30m into the club.

There is not an intention by him to invest further in the club at the moment.

"We have a very big squad. Our manager feels it is not necessary for it to be of that size, of nearly 35 players. The money for further transfers would need to be generated by sales."

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