The Scottish Premier League has embarked on an urgent search for a new television broadcast deal after finally severing its partnership with Setanta yesterday and will try to fill the £125 million black hole created by the implosion of the troubled satellite company.

Lex Gold, the SPL chairman , is confident that the league can attract a replacement broadcaster - and generate similar funding - before the start of the Clydesdale Bank Premier League season on August 15. The Irish company failed to meet a deadline yesterday to make an overdue payment of £3 million, as part of its contract, triggering the SPL's decision to end their five-year partnership.

Setanta at present injects more than £13 million a season into Scotland's top flight, but agreed last season to increase the deal to £125 million over four seasons, starting in 2010. However, failure to hold on to its rights to screen live Barclays Premier League matches prompted the company's lurch towards administration.

BSkyB, in which News Corporation, parent company of The Times, has a 39.1 per cent stake, and ESPN, the American sports broadcaster who picked up the rights to screen 46 English Premier League games next season from Setanta yesterday, are now seen as favourites to pick up the rights to screen live SPL matches. Reports yesterday claimed that that ESPN, which is owned by Disney, are willing to pay £112.5 million to secure a four-year deal - and Sky up to £87.5 million.

“We are now actively engaging in the process of selling our domestic broadcasting rights for next season and beyond,” Gold said. “We aim to do that as quickly as possible given that the season starts on August 15. That needs to be carried through quickly.

“We have not been able to get in to formal discussions because the rights have been with Setanta, but I believe that we have the most valuable sporting product in Scotland and Scotland is important to broadcasters, so I remain pretty hopeful that we will deliver an early outcome.

“I don't accept that we will have to take a reduced fee. We have a product that is valuable in the marketplace and we will be seeking to see that value covered. I have made informal approaches to no one. The clubs have been kept up to date on a regular basis so they are able to make prudent decisions.”

Setanta began its association with the SPL in 2004, but the league will now have to take legal action to recover the unpaid £3 million, which it already distributed to the 12 teams last month after Setanta's first default on the payment.

“We had built into the contract safeguards so we had guarantees that we will now be pursuing,” Gold said. “The lawyers are in the process of doing that but I would hope there would be no court case, our relationship with Setanta has always been very good.

“We set three deadlines and we wanted to work with Setanta who have been a great partner of ours. They have spent £60 million in supporting Scottish football and our board were determined to give them every possible chance to work through their problems. That process has been lengthy and intensive but the deadline [yesterday] was the final deadline.”

The SPL was criticised recently by Aberdeen, Celtic and Rangers, who had wanted to strike a deal with Sky last summer for the 2010-14 contract, but were outvoted by the other clubs. However, Gold insisted that the SPL's decision to take the promise of a larger sum from Setanta instead of the long-term security of Sky was not flawed.

“Twenty-twenty hindsight is brilliant,” the SPL chairman said. “You have to deal with the circumstances in front of you. Last year the board decided that we should go to the marketplace early. We still had two years of our contract to go and attracted two good deals, so there was a judgment call to make.”