PORT Vale Football Club will save £227,000 over the next two years after Stoke-on-Trent City Council agreed to a loan repayment holiday to help the club through the recession.

Club officials requested a two-year break in capital repayments on the £2.25 million council loan it accepted in 2006. The interest rate on the loan stands at around five per cent.

The move follows reports in November of losses of £383,738 as the club plummeted out of League One.

It is understood the request was agreed on Friday by a special council committee set up to provide assistance to struggling businesses during the recession.

A Port Vale spokesman said: "I can confirm the club has been in discussions with Stoke-on-Trent City Council regarding a payment holiday on the capital repayments of the loan from the local authority.

"The club has asked for this payment holiday to offset the impact of the lost revenue from its Britannia Building Society affinity scheme, which amounts to around £300,000 a year due to the large reduction in the Bank of England base rate."

Interest payments will still be made on the sum. Last year, the club paid off £113,783 in capital repayments. Over the next two years, the amount of capital repayments that are to be deferred is £227,566.

It has been suggested the reprieve goes some way towards addressing what many saw as an unfair discrepancy between the council's loans to Port Vale, which included interest payments, and Stoke City, which did not.

When Stoke City bought back the council's share in the Britannia Stadium for £5 million in 2007, it was agreed the money would be repaid in phased instalments of £1.5 million, with no interest charged on the outstanding balance.

That deal is now under investigation by the Audit Commission.

Councillor Mick Salih, who was one of the members who approved Port Vale's repayment holiday, said: "The club will still repay the interest, they are just extending the period of the loan. It's got to be good for Port Vale and the community as the club does a lot of work outside the football stadium. Port Vale seem to have had the short end of the stick compared to the Stoke City deal and we should be treating both clubs the same."

Paul Simpson, the council's director of central services, said: "The council is committed to helping businesses and safeguarding jobs in the recession.

"The new arrangements for Port Vale will help them during these difficult times and at no extra cost to council tax payers."

Chairman Bill Bratt estimated the cost of relegation at close to £300,000 due to a decline in attendances, match-day revenue, sponsorship and advertising, while player wages and costs went up.

Vale's long-term debt, including the loan from the city council, stands at £2.29 million. Short-term debt, including bank overdraft, social security and other taxes, was up £99,000 to £1.59 million in November.

Mr Bratt predicts the club will make a further loss for this season. However, he has reassured supporters the club's future is secure.