Rangers administrators seek quick sale
The administrators will also accelerate the sale of the club after failing to agree cost-cutting measures with players.
"The club is in a perilous financial situation and that should not be under-estimated. Regrettably, we have been unable to agree cost-cutting measures with the playing staff on terms that will preserve value in the business," joint administrator David Whitehouse said in a statement.
"As a result, we are expediting the sale process and over the next few days we will be holding discussions with prospective purchasers who have declared their interest."
Whitehouse also warned "that in the absence of sufficient cost-cutting measures or receipt of substantial unplanned income, the club will not be able to fulfil its fixtures throughout the remainder of the season".
The Glasgow club, league champions a world record 54 times, went into administration last month owing nine million pounds in payroll and sales taxes.
Chairman Craig Whyte had been optimistic that the club would be able to come out of administration by the end of the month, and therefore meet UEFA's requirements.
However, joint administrator Paul Clark said Whyte was being unrealistic since there were several issues yet to be resolved, including unpaid taxes.
The news would pose yet another financial setback for the club as they will lose out on money they would have earned had they competed in Europe.
"The likelihood of the club being able to emerge successfully from administration before this deadline as indicated by the chairman was, at best optimistic given the perilous financial situation at the club at the time of insolvency," said Clark.
"The company accounts cannot realistically be signed off by auditors in a manner that would meet the criteria required by the footballing authorities."
Players and coaching staff had been in negotiations with the administrators over wage cuts in a bid to save one million pounds a month but Whitehouse confirmed that an agreement could not be reached.
"We understand the players' position as the scale of wage cuts required to achieve these savings without job losses were very substantial indeed," Whitehouse added.
"In view of this, we are faced with a situation of making redundancies within the playing staff on such a scale that would materially erode the value of the playing squad.
"We are striving to strike a balance where cost-cutting measures can be implemented but do not destroy the fabric of the playing squad to the extent that it will inhibit the prospect of a sale.
"If however it becomes apparent that the sale process cannot be accelerated there will be no choice but to implement very severe cost cutting measures at the club."
Since going into administration, the financial practices of the club are being investigated by various bodies, including the Scottish Football Association and British tax authorities.
Whyte's takeover of the club last May is also being investigated after the club confirmed he had previously been disqualified as a director.
Rangers remain second behind arch-rivals Celtic in the SPL despite incurring a 10-point deduction after going into administration. They have another nine fixture left this season.