Newcastle have been ordered to pay former boss Kevin Keegan £2 million in damages after he won his case for constructive dismissal.

The independent arbitration panel found in Keegan's favour following his departure from the club in September last year.

Announcing its decision, the panel said in a statement: "We declare that Kevin Keegan was constructively dismissed by Newcastle United Football Club Ltd, for which Newcastle United Football Club Ltd must pay to Kevin Keegan damages in the sum of £2 million plus interest to be assessed if not agreed."

Despite losing the case, the level of damages will come as a relief to owner Mike Ashley after it was confirmed that Keegan was claiming in excess of £25m.

Keegan resigned in protest at the club's transfer policy when Uruguayan midfielder Ignacio Gonzalez was brought to the club on the final day of the summer transfer window against his wishes.

He claimed £8.6m in salary and other benefits to which he would have been entitled had he seen out the remaining years of his contract, which was due to expire in June 2011, and a further £16.5m in "stigma damages" in compensation for the effect of the saga on his future earning capacity.

Keegan released a statement through the League Managers' Association, who have represented him throughout the case.

In it, he repeated his claim made during the hearing that he had been asked to approve the signing of Gonzalez, who he had been told to look up on YouTube, to foster a relationship with two South American agents.

Keegan said: "I resigned because I was being asked to sanction the signing of a player in order to 'do a favour' for two South American agents.

"No-one at the club had seen this player play and I was asked to sign him on the basis of some clips on YouTube."

> Posted by: Iconic Magazine