King’s Lynn Town have been presented with three options – including scrapping the season – as the National League looks to resolve a funding crisis.

Clubs fears for their future if future funding to compensate for the absence of fans is in the form of loans, rather than grants, as has been the case so far this season.

The National League season began in October after it received a £10m grant from the government, funded by the National Lottery, for the first three months.

However, clubs are now being told future funding will be through loans.

League officials held talks with clubs on Wednesday when three options were put on the table:

1 The operation of a club loan process, where individual clubs take out loan from January to March

2 The National League take the loan and then distribute to member clubs

3 Suspend the season

Clubs are clearly concerned at what they see as a moving of the goalposts over the form of funding – they believed it to be grants not loans - and interim National League chief executive Mark Ives, who replaced Mike Tattersall, who stood down at the end of December, spoke with clubs on Wednesday.

However, a statement from the Department of Culture, Media and Sport said: “Last year we brokered a unique deal between the National Lottery and the National League to provide a £10m cash injection for these much-loved clubs. Since then we have announced a further £300m investment to protect the immediate future of spectator sports, including another £11m for National League clubs to help them finish the season.

“It is incorrect to suggest funding was ever promised as grants. Clubs in scope will be assessed for support on the same criteria as other professional clubs.”

Clubs have been told to email their response to the three options to the National League, who are expected to meet again on Friday to discuss the next move - their least favoured option is a suspension of the season.

The League expect clubs to honour fixtures scheduled for this weekend and next midweek.