Nick Merry has insisted Oxford United Football Club are in a better position than two years ago - despite the team's relegation from the Football League, falling gates and increasing financial losses.

Today the second anniversary of Mr Merry and Ian Lenagan's acquisition of 89 per cent of the club from former chairman Firozcorr Kassam for £2m - effectively £1, when debts were accounted for.

Mr Merry's arrival, coupled with the return of Milk Cup-winning manager Jim Smith, gave fans a sense of optimism that the club would begin to claw its way back up the table and improve its financial stability.

But within weeks of the takeover, United were relegated from the Football League.

They were lying 16th in the Blue Square Premier League table going into today's game at Halifax Town, after missing out on promotion last season, when they lost in the play-off semi-finals to Exeter.

Mr Smith stood down as manager, while retaining his position as a director last November, but new boss Darren Patterson has been unable to lift the team up the table.

The average home attendance this season at the Kassam Stadium - which is still owned by the former chairman's company Firoka - is 4,796, about 650 down from the 2005-2006 season when United lost their Football League status.

Mr Merry has admitted the dwindling gates mean he expects to make a larger loss this year than the £720,000 deficit last year - despite co-owner Ian Lenagan'scorr claim in August that the club planned to cut losses by £470,000 over three years.

Speaking exclusively to the Oxford Mail, Mr Merry insisted: "The club is in a better position than it was two years ago, without a doubt. There's an infrastructure in the club and around the club that it never had two years before."

But he admitted: "We're going to have a large loss. I do not know what it will be.

"It will be higher than last season. The gates have dropped and that affects the revenue.

"Although the results have been poor the hope is that we will just improve.

"The club is a major part of my life. I'm committed to doing the best I can do."

Mark Mallinson, a founder member of Oxford United supporters' trust OxVox,corr said: "When Mr Merry took over, there was a much more positive feel. People thought it was a turning point.

"But it has not been the turning point everybody hoped and believed it was.

"I don't think he has done a good job. We're in a worse league position than when he took over and the club isn't making the most of all the money and resources it supposedly has."

Mr Merry, a former youth team player, said he recalled the moment he took over the club with pride.

He said: "Oxford United is closer to my heart than any other football club.

"It was great feeling to take over a club that meant so much to me, but at the same time there was trepidation, knowing the task was going to be a big one ahead of us.

"It has been a mixture of highs and lows. The first season we put a lot into it and made an attempt to get promotion and it didn't happen.

"The second year has not been a season that we will want to remember, but there were a lot of things to sort out at the club that we're still working on every day.

"The low point is probably about now.

"We're languishing in the bottom part of the table, which we know we shouldn't be.

"It's the lowest in terms of results but not in my feeling for the club."