Sheffield United have revealed today that they plan to sue West Ham United for the cost of relegation from the Barclays Premier League.

United are still fuming over the Premier League's refusal to dock points over the Carlos Tevez affair and instead impose a £5.5million fine, which they feel had a bearing on their relegation and West Ham staying in the top flight, a decision that the Yorkshire club estimate will cost them between £30 million and £50 million.

After they were refused permission by the High Court to appeal the decision of an arbitration panel to dismiss their claims and having had their relegation confirmed, attempting to recover some form of compensation was their only remaining course of action and it was not an unexpected move.

Paul Stothard, Sheffield United’s solicitor, had said at the time: “You can be fairly confident that the issue won’t rest here.”

“Sheffield United are not precluded from taking further action against the Premier League or West Ham,” Stothard added. “The compensation would be top of the agenda because there are significant consequences financially for being relegated wrongfully, as we believe we have been.”

The arbitration panel accepted that docking points so late in the season would have “consigned the club [West Ham] to certain relegation” and that the players and fans were not to blame. They also acknowledged that West Ham had pleaded guilty to breaking the rule which forbids the ownership of players by a third party and of failing to provide correct documentation, that there had been a change in ownership of the club and that the finance director had brought the problems to the attention of the FA Premier League when Liverpool wanted to sign Javier Mascherano in January.

The panel did say, however, in delivering its verdict: “We are of the view that these are exceedingly serious allegations because they amount to not only an obvious and deliberate breach of the rules but a grave breach of trust as to the FAPL [Premier League] and its constituent members because in our finding the club has been responsible for dishonesty and deceit.”

Toby Craig, a member of the Sheffield United’s legal team, said today: “After consideration and discussion with our legal advisers Sheffield United are today initiating legal proceedings against West Ham United as we seek substantial compensation for our relegation from the Premier League.”

The statement continued: “This action is distinct from the arbitration proceedings between the club and the Premier League during the close season. We have always said that we will do everything in our power to secure justice for Sheffield United and restore the integrity of English football which has been tarnished by this affair.

“Once proceedings have been issued we will await a response from West Ham before making any further statements.”

United are expected to argue that each club enters into an agreement to act in good faith with other clubs and that agreement was broken when West Ham admitted breaching the rules in the transfer of Tevez and Javier Mascherano. They may also argue that West Ham breached their contract with the Premier League.