FORMER Supporters' Trust board member Mike Grant has expressed his surprise and disappointment that his proposal for a solution to York City's financial problems has been dismissed as "unworkable" by the Trust board.

A Trust special general meeting is due to be held within weeks to consider a proposal from JM Packaging, owned by City's managing director Jason McGill, which is expected to suggest a change in the club's ownership structure.

The Trust are currently 85 per cent majority shareholders, with McGill owning the remaining 15 per cent.

But JM Packaging recently asked the Trust board what provisions were in place to meet a £300,000 loan, facilitated by the Malton-based company, by its January settlement date.

City have also accrued estimated £150,000 losses over the last season and failed to meet their first £100,000 repayment on the club's £2million Football Foundation loan.

In an earlier proposal, leaked to the Press by Grant, JM Packaging offered to cover last season's losses, meet the annual £100,000 repayments for the next five years, subject to obtaining a successful planning application to build houses at KitKat Crescent within 12 months, and exchange their £300,000 loan for a 76 per cent shareholding in the club.

But this total investment of £950,000 would be treated as a loan with an interest rate of 12 per cent, meaning JM Packaging would receive £650,000 on the assumed sale of KitKat Crescent when the club were in a position to move to a new stadium.

Meanwhile Grant, fronting a small collection of fellow Hurst Group (Northern) Limited construction company directors, has put forward a proposal to the Trust to loan the club £200,000 at the same level of interest without any requirement for shares in the club in return.

As part of the proposal, Grant requested two of the six seats on the club board for himself and the group financial director but added that the positions would be considered as "non-executive" and purely as a means of protecting the investment and not interfering with the running of the club.

Grant, 57, added that he would want McGill to continue in his managing director capacity to avoid former chairman Douglas Craig exercising his £200,000 "put option" which could be detrimental to City financially.

He also requested that Ian McAndrew carried on in his role as stadium development director.

Grant said: "The loan would be repayable upon sale of the ground or earlier if the Trust wished should they be able to secure finance on more preferable terms when the ground is revalued following the granting of planning permission."

As part of his proposal, Grant asked for permission to carry out an independent financial assessment of the club and requested an anticipated date for the granting of planning permission at KitKat Crescent for loan security purposes.

He also wanted access to the £300,000 loan agreement with JM Packaging, verification of the repayment conditions and confirmation of Craig's "put option" clause entitlements.

But all his requests were denied.

A disappointed Grant said: "I've received other expressions of interest outside my group but, before exploring those, we required the above information. Several supporters have also expressed the wish to have an opportunity to invest on those terms.

"I am convinced that if these alternative avenues were to be explored, the amount my group intended to invest could have been easily doubled. So where in all this is the proposal unworkable? Unfortunately, as the Trust did not permit access to the requested information, we never got past first base."

Updated: 10:07 Tuesday, May 09, 2006