Red City Developments, the consortium behind the new 22,000-seat stadium for rugby league club Salford City Reds, in Manchester, has been placed into administration.

Red City Developments (RCD) is a partnership between Peel Holdings, the rugby league club owned by John Wilkinson, private businessman Stephen Kirby and other partners.

Peel Holdings was unavailable to comment on the reasons why the firm is in administration, but the club insists that the stadium project will still go ahead as planned. RCD has brought in insolvency firm Begbies Traynor to assess the situation.

The stadium, which is set to cost £35m, is part of a £130m development which began February 2008. If successful, it will also include a four-star hotel, shopping mall and casino built on an 80-acre site.

A spokesperson for the rugby club said: "Due to the changing needs, requirements and restructuring of the development company, we at Salford City Reds look forward to the stadium being delivered to Salford and its supporters on time for 2010.

"We look forward to working with Peel to deliver this stadium and count on their expertise and know how to build an iconic stadium we can all be proud of."

Manchester Evening News has reported that the firm's insolvency is related to financial issues being experienced by businessman Stephen Kirby, a investor in Red City Developments.

The firm was placed into administration days after The Rugby Football League awarded the club a three-year franchise licence for next season's Super League.