Albion are counting the cost of their drop back into the third tier of English football.

The Seagulls made a loss of more than £2.8 million in the year ending June 2007, their first season in League One following relegation from the Championship.

It is the biggest deficit since they moved into Withdean and a massive hike compared to a £253,000 loss the previous year, although that figure excluded over £2 million received from the transfers of Adam Virgo to Celtic and Dan Harding to Leeds.

Albion's annual accounts show that turnover fell by 21 per cent to £4.2 million, largely due to the consequences of relegation.

Their share of central funds from the Football League dropped by more than £750,000 to £499,000, while gate receipts, commercial activities and TV and radio royalties all suffered falls ranging from nine to 40 per cent.

The directors' report says: "The effect of relegation to League One is clear to see on all areas of club revenue.

"Average league attendances fell to 5,829 compared to 6,802 in 2005-06. Clearly league status and the poor facilities at Withdean are the main factors in this drop."

Relegation had one benefit - Albion's wage bill dropped by almost £400,000 to £3.3 million, with six fewer full-time staff and 39 fewer part-time employees.

A further £500,000 was ploughed into Falmer, raising the total spent on the new stadium project to £3.6 million.

The directors' report adds: "The operating loss clearly demonstrates the urgent need for Falmer with all the facilities, commercial and economic benefits and additional revenue streams it will generate, as losses of this nature can only be sustained through the sale of players or shareholder funding."