MPs have been told £1million of two loans provided by a Blackburn businessman to Bury FC failed to reach the club.

Stewart Day, whose Mederco property empire crashed earlier this year, had mortgaged Bury's Gigg Lane ground with Merseyside-based Capital Bridging Finance Solution Ltd for £2.5m at an interest rate of 138 per cent, the House of Commons Digital, Culture, Media and Sport Committee was told.

Evidence was being heard by the committee on the expulsion of The Shakers from the English Football League in August.

Barry Roth, an accountant and former director of supporters group Forever Bury, said only 60 per cent of those loans (£1.5m) 'actually went into to the club's bank account'.

The other 40 per cent (£1m) was paid as an 'introductory fee' for arranging a lower rate of interest for the loan of 7.5 per cent.

Mr Roth was asked by committee chairman Damian Collins who was the beneficiary of the £1m introductory fee.

He replied: "We don't know."

Mr Roth said he found this introductory fee 'unbelievable'.

Mr Collins, who is to visit Bury on Friday as part to the inquiry into the administration of football clubs, said: "Let's call this loan shady at best. The ground was effectively sold to this company.

"There were people who were profiting in a exorbitant manner from the failure of this club. There are people who have made money from the failure of this club."

Mr Collins said the committee would use its powers to obtain ask for a copy of the so far unpublished 2018 accounts for Bury FC.

Mr Day's various Mederco property firms, all based in Lions Drive, Guide, went into administration in April and may now owe creditors £54million.