Southampton Football Club (SFC) has been deducted 10 points by the Football League after its parent company, Southampton Leisure Holdings (SLH), entered administration earlier this month.

The decision follows the publication of an independent forensic report, which was conducted by Grant Thornton on behalf of the Football League, to investigate the circumstances surrounding the relationship between SLH and SFC. Grant Thornton's report concluded that the links between holding company, the football club and an associated stadium company meant that they existed as a single economic entity, with all revenue derived from the operation of SFC and the stadium company.

A statement from the Football League said: "In light of all this advice, the board concluded that an administrator had been appointed in respect of the club or part of its undertaking or assets. "Accordingly, it was left with no alternative other than to invoke its 'Sporting Sanctions' regulations and apply a 10 point penalty to the club."

However, both the football club and SLH's administrators have announced that they intend to contest the decision, claiming that they had not even been made aware that the investigation into the situation had finished. A statement on behalf of the administrators said: "We are of the opinion that an incorrect conclusion has been reached. The football regulations do not apply to the circumstances surrounding Southampton Football Club. This is a view shared by the lawyers and advisers to both the club and the administrators."

The Football League had ruled that if SFC finished outside the Championship relegation zone this season, the points deduction would be applied instantly. However, the club's failure to defeat Burnley on 25 April means that the club will be relegated to League One and will incur the points deduction at the start of the 2009-10 season instead.