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HM Revenue and Customs (HMRC) will not pursue its dispute over the validity of the administration at Portsmouth football club, the BBC has learned.

A scheduled High Court hearing is still expected to go ahead on Monday.

But administrator Andrew Andronikou says an HMRC challenge to his appointment will now be dropped.

Mr Andronikou, of UHY Hacker Young, was appointed administrator last month, and cut 85 jobs at the club on Wednesday.

Portsmouth are facing a nine point deduction for entering administration.

'Substantial interest'

The validity of Mr Andronikou taking charge of the club matters had been challenged by HMRC.

But on Thursday afternoon he told the BBC that the challenge had been dropped.

"We can now send out letters of terms of engagement," Mr Andronikou said.

"Interested parties have to pay £5,000 - that allows us to concentrate on real buyers.

"After six weeks they get the money back or can donate to charity."

He added: "From what I've seen there are five substantial interested parties. One has had an interest in a football club before.

"My abiding concern is that we find the right buyer."

Mr Andronikou had earlier said that interested parties have to provide him with proof of funds and a proven financial covenant before he would release further financial documents for scrutiny.

On Wednesday when the job losses were announced he said no players were being made redundant as they were the "shop window" with regards to finding a potential buyer.