It has been confirmed a government body dismissed the board of directors of Landsbanki bank in Gudmundsson's native Iceland and it is now expected to be nationalised as the credit crunch takes effect.

Gudmundsson, who took over as West Ham chairman in December 2007 from Eggert Magnusson, owns around 40 per cent of Landsbanki with his son and he faces the prospect of losing much of his personal fortune.

The news will raise question marks over the future of Gudmundsson's ownership of West Ham and comes as a major blow with the club already contesting a mulit-million financial claim from Sheffield United over the Carlos Tevez affair.