Leicestershire are facing a massive annual loss of £300,000 and a "serious" financial position, according to the club's chairman Neil Davidson.

Davidson's position at Grace Road had been under pressure following a letter sent to his fellow directors from players and coaching staff at the club calling for him to step down in the wake of former chief executive David Smith's decision to resign in June.

Davidson said last week that he had no intention of resigning.

A meeting of the board was held at Grace Road yesterday.

According to a statement issued by the club and published on its website, directors John Allen, Tony Hill, Andrew York and Mike Siddall, together with club president David Wilson, confirmed their support for Davidson.

After the meeting, another director, Paul Haywood, the former Leicestershire batsman and committee member, said he had offered his resignation. He declined to comment further on the move until he had taken time to consider his position over the weekend.

The club statement said that losses for the year ending September 2010 are currently projected at around £300,000 "before taking into account any donations."

It added: "In November last year, the board approved a revised budget presented by the former chief executive, David Smith, which showed a £59,000 deficit.

"This took account of employment costs associated with Matthew Hoggard, Andrew McDonald and Brad Hodge and it was expected that donations would eradicate this shortfall.

"The additional projected loss of (circa) £250,000 consists of a £140,000 revenue shortfall and £96,000 of non-budgeted costs."

The statement said that the revenue shortfall is primarily down to poor attendances in the Friends Provident T20, lower than anticipated membership sales and "poor performances in the areas of corporate sales and marketing."

The statement, issued by the club and published on its website, added: "Moreover, it has very recently come to the notice of the board that a sponsorship deal worth £125,000 over five years plus other benefits was rejected by the former CEO in August 2008, for no apparent reason and without reference to the board.

"Furthermore, a generous offer by the Big Communication Group to help improve the marketing of the club was never followed up."

The statement added: "The board has also, very recently, received information of what amounts to a planned undemocratic takeover of the club.

"The board is carrying out its own investigation but will vigorously resist any such attempts on behalf of the membership."

Following the board meeting Davidson talked of a very difficult future for the club in the face of such financial figures.

"The club is in a serious position financially," he said.

"The board is focused on that position. It is only fair that the members know what that position is."

He added: "My job is to represent members interests.

"If, at the end of the day, the members say they don't think I have represented their interests correctly, I will go."

Members look increasingly likely to have their say on the unrest at the club over recent months with a second petition calling for a special general meeting delivered to the club this week.

Smith said: "I resigned on June 28 and was very happy to work my notice through to September 20, covering three of the four most important financial months of the year.

"The club made the decision to put me on gardening leave and, as chief executive of the club, that staggered me knowing that they were the key financial months of the year.

"At my time of leaving, the forecast loss at the June board meeting bears no resemblance to the figure that I have read in the statement on the club website. I look forward to responding in full over the course of the next 48 hours."