Livingston FC has been relegated to the Irn-Bru Third Division by the Scottish Football League.

The move could result in the death of the West Lothian club. A consortium of businessmen who were ready to buy the club said they would back out if they were relegated to the fourth tier of Scottish football.

Following the SFL decision at Hampden on Wednesday, one of the potential buyers - Donald McGruther - said the consortium was extremely disappointed with the decision and they will now consider their options, adding the punishment was a "death knell".

A statement released by the SFL said: "At a meeting today of the league management committee, Livingston Football Club were found to be in breach of rule 76.2 relating to insolvency.

"The sanction imposed was to place Livingston Football Club in the third division for season 2009/2010. We believe a third division placement offers Livingston Football Club the chance of continuing their membership of the SFL. Airdrie Utd FC and Cowdenbeath FC have been promoted to the first and second divisions respectively."

Livingston were placed into administration at the Court of Session in Edinburgh three weeks ago for the second time in five years. West Lothian Council had taken the club to court over an unpaid £330,000 debt.

Last Friday, after a week of turmoil, chairman Angelo Massone finally decided to sell his shares.

Mr Massone accepted an improved offer of £50,000 for his 76% stake in the club from the Court of Session’s appointed interim manager, Mr McGruther.

The potential buyers are now considering whether to appeal the decision. They have ten days to make that choice. The fixtures of Livingston, Cowdenbeath and Airdrie look set to be affected.