YORK City Knights could be given a National League One lifeline following news Halifax are on the brink of going under.

Directors at the Shay claim they have just three weeks to save the club from liquidation - and if they fail they would drop out of the league.

This means there could be one new space available in NL1, and Rugby Football League chiefs may then decide to relegate just one team instead of two - meaning the Knights, who are now certain of finishing second bottom, would stay up.

The RFL's other options would be to run with only nine teams in NL1, which would be highly unlikely, or promote a third club from NL2.

A fourth option would be to allow any new Halifax club - should one be formed - to take Fax's place in NL1, though this is the most improbable, especially given the precedent set by York in 2002.

Then, the old Wasps club went bust midway through that season and York's membership of the RFL ceased, and the new club borne out of those ashes - the Knights - had to start at the bottom of the semi-professional pile.

Halifax - who were formed 100 years ago and were in Super League just three years ago - have called an emergency meeting at the Shay for September 11 when directors will propose the club is wound up and a liquidator appointed, unless they receive a big influx of cash beforehand.

Company secretary Michael Steele said: "We will have no alternative unless sufficient funds turn up between now and September 11.

"We cannot keep trading on a wing and a prayer, hoping something will turn up."

The club, whose average gate is about 1,600 this year, are hoping to attract a record 5,500 crowd for their last home game of the regular season, against Whitehaven on September 3, which would help to wipe out an overspend on players' wages of £86,000 - the source of the problem.

That overspend, The Press understands, has not taken them beyond the RFL's salary cap - but it has breached the club's financial budget for September, October and November.

A spokesman for the RFL said that if Halifax were to go into liquidation, their membership of the RFL would be suspended and the effect on NL1, and their continued membership, would be decided by the RFL board of directors.

It is possible that, under new rules, Fax could face a sporting penalty of six league points - they currently lie six points ahead of York with two games to go - as punishment for an "act of insolvency".

However, it is not known if this penalty would come into effect this season given the amount of paperwork involved.

Docking points would be academic to the West Yorkshire club because the only act of insolvency being considered by Halifax is liquidation, in which case they won't exist next season anyway. Other acts of insolvency include administration, but Fax are believed to have ruled out this course of action, saying their only hope is to rake in enough money to avoid any act of insolvency whatsoever.

Docking points could, however, affect the play-off picture as Fax are pushing for a top-six place, and it may even have a bearing on York's final position in the table: if the Knights ended up finishing above Halifax, the RFL would not need to decide who replaced Fax in NL1 next year as York would not be relegated.

The decision on Halifax's future is due between the end of the regular season and the start of the play-offs.