A rescue package is being pulled together in a bid to save the troubled Morris Motors Athletic and Social Club, it emerged last night.

The Cowley working men's club, founded in the 1920s, last week faced a winding-up order from Customs and Excise.

It went into compulsory liquidation, which means it should have ceased trading - although yesterday the bar remained open.

Now Eddie Costello, of Chesside Homes, which is developing 17 houses and 46 flats on the site, has offered fresh hope it could be saved.

He said: "My intention is to pay off the creditors and get the club up and running again."

The club owes Mr Costello about £1.5m for building the new clubhouse - now almost complete - making him the organisation's largest cred- itor.

Mr Costello said: "Within the next two weeks, I hope to be back in the High Court and get this winding-up order rescinded.

"My solicitors are working flat out to come to an agreement with the club's creditors and to save it from liquidation.

"Club secretary Michael Kelly and his committee have worked hard to save the club and the last thing I want now is to see it closed down.

"The reason why I want to save the club is that the club approached me in the first place and I have worked hard with its committee over the years to keep it afloat."

Chairman and treasurer of the club Rod Smitham said: "We have worked well with Mr Costello for some time and of course I am delighted that he is now trying to save it."

Meanwhile, former club member Hugh Charles, who was banned during recent in-fighting over the organisation's future, also wants a resolution. "I only hope Mr Costello can save the club," he said.

Mr Costello said: "We are not making much money out of this development because Oxford City Council took 30 per cent for social housing - which means that we will only receive build-cost for that element. But they get the land for nothing.

"Overall we will probably only make between 10 and 15 per cent on the total deal."

In 2002, Mr Costello paid £10 for an option to develop land adjoining the club.

He agreed to pay for the land by building a 17,000 sq ft clubhouse. He said: "Then the members voted for a 28,000 sq ft clubhouse, which we have now built, even though it cost them an additional £1.3m.

"Now the club owes me that money, plus about 10 per cent or so."

Mr Costello insisted: "If I wanted to call in that money now, I could.

"But I don't. I want to keep the club alive.

"There is a lot of rubbish being talked about Chesside and the club.

"Savill's valued the old clubhouse at £1m - now the members have a clubhouse that cost between £4m to £5m to build."

A condition of planning permission states that the flats and houses cannot be occupied until the clubhouse "is complete and available for use".