Rangers chairman Craig Whyte, who bought an 85 percent stake in the club for a nominal one pound last year, said there was no 'realistic or practical' alternative course for the Glasgow giants, champions a record 54 times.
"It is extremely disappointing the club finds itself in this position but decisions have to be taken to safeguard the long-term survival and prosperity of the club both on and off the field," Whyte said in a statement.
"The harsh reality is that this moment has been a long time coming for Rangers and its roots lie in decisions taken many years ago. If we do not take action now the consequences and the risks to the club are too great," he added.
Rangers could face a bill of more than 50 million pounds if they lose the case currently before a tax tribunal and the club warned it could not pay that amount.
They are second in the Scottish Premier League, four points behind Celtic, but face a 10-point penalty if they do go into administration, a decision expected over the next 10 days.
In England, there were media reports that Championship club Portsmouth were set to go into administration over an unpaid tax bill of 1.6 million pounds.
Portsmouth have been struggling since November when Russian owner Vladimir Antonov was arrested in connection with alleged fraud at a Lithuanian bank.
Rangers said they would have to cut costs and review staffing across the club if they were to go into administration.
They sold Croatia international striker Nikica Jelavic to English Premier League club Everton last month.
Whyte vowed that the club, founded in 1872, would survive.
"I can reassure Rangers supporters that the club will continue and can emerge as a stronger and financially fitter organisation that will compete at the levels of competition our fans have come to expect."
The club is expected to come up with a proposed restructuring that will ensure creditors would be paid and provision made for the tax case. The aim is to minimise any points deduction and allow Rangers to play in lucrative European soccer next season.
Rangers are one of the best supported clubs in Britain, with an average home attendance this season of more than 45,000.
However, the 12-team Scottish Premier League is a poor relation to its English counterpart in terms of television revenue and sponsorship deals.
Rangers' fierce rivalry with Celtic often adds to sectarian tensions between Protestants and Roman Catholics in Glasgow and the surrounding areas.
Aberdeen, then managed by Sir Alex Ferguson, took the Scottish league title in 1985 - the last time it was not won by one of the Glasgow giants.
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