Paul Lambert today labelled Rangers' financial mess as a 'disaster' for Scottish football.

The Norwich boss – who won multiple honours as captain of fierce Glasgow foes Celtic – believes the Ibrox club's slide into administration is a major wake up call. Lambert, however, insists his former club can still prosper north of the border despite the financial crisis engulfing their bitterest rivals.

'I think it is well-documented the situation they find themselves in. What has happened up the road is not great for Scottish football. That is for sure,' said Lambert, ahead of Saturday's FA Cup fifth round home tie against Leicester. 'I don't think it is great for the game up there given the size of Rangers football club. I said before Celtic and Rangers are global – it's not just European terms. They are worldwide football clubs and for the game up there it is a bit of a disaster.

'But I'm not so sure Celtic need a strong Rangers. I think Scottish football needs one. Celtic had their problems in the 1990s but I'm not sure the two clubs need each other. Fergus McCann took it over and saved it and built the stadium and the team got built from there.

'I understand coming from Glasgow what the people are going through up there. It must have happened for years and years gone by, the spending. You don't have to be Einstein to look at it and say where it has gone wrong. The spending has probably outweighed everything.'

Championship club Portsmouth were earlier today forced into administration for the second time in the past three seasons. The south coast strugglers could be deducted upto 20 league points following the High Court winding up order. City chief executive David McNally stressed again this week the importance of fiscal responsibility and Lambert agrees the balance has to be right.

'You also want to be successful. I want to be as successful as I can be here and sometimes to do that you need to try and spend to compete,' he said. 'I understand there is a balancing act to it but I am pretty sure this football club won't go the way it was heading a few years ago when it was just about to follow Rangers.

'It can happen. Money doesn't buy you success, but it certainly helps. That is for sure. It helps you.'