Southampton 2 Leeds United 1: The Leeds board will this morning apply to creditors for a seven-day extension to their administration deadline after failing to secure a bid for the club.

The hiatus is intended to provide the board with time to raise £5 million of interim funding that will help take Leeds to the end of the season, when the team's fate for next term will be clear. The funds are anticipated to come from investors. However, part of the sum may be raised through player sales.

"We are fairly confident we can put that package together next week, and a number of options are being considered to raise that," said Trevor Birch, the Leeds chief executive.

"It will enable us to put the funds in place to fund the club for the rest of the season. We have some certainty then. We are either still in the Premier League or relegated, and both scenarios provide different solutions.

"It's quite clear that nobody is out there wanting to take the risk on relegation because it brings with it a big trading loss. Anybody buying at this stage is taking a risk they will be on the hook for that next year."

Birch confirmed that those players who remain at Elland Road might be asked to accept a deferral in wages of up to a third, and the caretaker manager, Eddie Gray, accepts he cannot expect to keep his already threadbare squad intact.

"The situation we're in, you're probably going to get teams coming in and looking at your players," said Gray. "You expect that when you've got good players but we'll just have to wait and see what happens.

"It doesn't make it any easier for anybody but the most important thing to me is the survival of Leeds United. The important thing is to try and stay in the Premiership - but when I joined in 1963 it was a second-division club."

If a sense of resignation can be read into Gray's words, it was also manifest in several of his players' performances. On their last visit to the south coast, Leeds were drubbed 6-1 by a Portsmouth side who had learnt to be so ruthless during last season's canter to the first-division title.

For much of Saturday's second half, before Matthew Kilgallon's 75th-minute headed goal, the Leeds players' body language and positioning indicated they were expecting similar treatment. Southampton, however, could not replicate such callous efficiency and allowed their opponents back into the game.

The home side had engineered a two-goal lead by half-time, Brett Ormerod having turned Kilgallon and Zoumana Camara to score from David Prutton's through ball, and Kevin Phillips pouncing on a mistake from Camara.

With seven players out through a mixture of suspension, injury and international commitments, and Mark Viduka away in Australia on compassionate leave, Leeds were severely undermined.

Leeds have fielded 26 players this season, more than any other Premiership team, yet too few are of top-flight calibre, making Gray's job as tough as that of his chief executive.

The Scot admits confidence is low and only a winning sequence can raise it again, but that hope seems increasingly forlorn. "It's getting near the end and we've got to start winning games," he said.

Though Birch understands the hesitation of potential bidders against such a backdrop, he is frustrated at the claims that the Bahraini sheikh Abdulrahman Bin Mubarak Al-Khalifa is preparing a bid for the club.

The reports sparked furious trading in Leeds's almost worthless shares last Friday, which only added to the sense of calamity.

"It's time [the sheikh] shows us the colour of his money, to put up or shut up," Birch said. "I'm certainly getting fed up of reading what he's about to do in the papers. I think it's done nobody any favours. It just raises expectations and leads to people being upset when those deadlines aren't reached."

Southampton's manager, Gordon Strachan, a former Leeds captain who was linked with the Elland Road position following Peter Reid's sacking in November, said he felt for his old club.

"I've got sympathy for anybody who wants to be a manager like Eddie, because I've been there myself, I know what it's like, and I'll tell you what they don't want right now - it's being patronised," said Strachan. "That's the worst thing that can happen to you, so I'm not going to join that."

Strachan is right. Birch and Gray, like the Leeds fans who valiantly sang to the end of this defeat, will emerge with their dignity from a disaster that is far from their own making.

Meanwhile, Alain Perrin, the Frenchman who took Marseille into this season's Champions League, has emerged as a leading candidate to take over from Strachan at Southampton.

Southampton's chairman, Rupert Lowe, travelled to France last week and is thought to have held preliminary talks with the 47-year-old.

Perrin, who was sacked by Marseille last Wednesday, is precisely the type of coach Southampton want - someone from the continent who is used to dealing with a squad full of internationals and has experience of leading teams in Europe.

Perrin's first taste of the Champions League saw Marseille finish third in their group this season behind Real Madrid and Porto.

Previously he had coached Troyes in the UEFA Cup, in 2001/'02, when his team were knocked out by Leeds United in the second round.