Newport County are set to issue Barry Town with a winding up order as Wales' top club side still owe the Exiles £10,000 after selling Mike Flynn to Wigan Athletic.
Newport-born Flynn joined Barry from County in November 2000 on a free transfer, but the deal included a sell-on clause of either 40% or £10,000 - and as Second Division Wigan signed the 21-year-old for around £15,000 in June the Dr Martens Premier League club are owed £10,000.
But County are yet to receive a penny from Barry despite several requests.
Newport's solicitors served Welsh double-winners Barry with a Statutory Demand for the cash on October 31, which gave the Dragons three weeks to settle the debt or arrange for payment to be made.
The deadline expired at midnight last Thursday and County are now set to get the legal cogs in motion.
The club now stand to take the unprecedented step of instructing their lawyer to issue a winding up order to put Barry Town into liquidation through the courts in a bid to get their money back.
But this is not an issue County are taking lightly as they could banish the current League of Wales champions and Welsh Cup holders from football - but the Exiles feel they are left with no choice.
Newport County secretary Mike Everett said: "We don't really want to have to take this course of action and we certainly don't want to do this to another club, but we are left with no choice.
"We contacted the Barry Town secretary and we have been told to ring them back. If the matter is not resolved satisfactorily today, we will take legal action.
"We have given Barry Town every chance to pay the money and we've been patient, but we have come to the end of the line. Legal action is our last resort."
Barry Town were unavailable for comment today.
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