Keegan wins £2m damages from Ashley

Newcastle United have been ordered to pay former boss Kevin Keegan £2 million in damages after he won his case for constructive dismissal.

The independent arbitration panel found in Keegan's favour following his departure from the club, owned by Mike Ashley, in September last year.

Despite losing the case, the level of damages will come as a relief to Ashley after it was confirmed that Keegan was claiming in excess of £25 million.

He claimed £8.6 million in salary and other benefits to which he would have been entitled had he seen out the remaining years of his contract, which was due to expire in June 2011, and a further £16.5 million in "stigma damages" in compensation for the effect of the saga on his future earning capacity.

Keegan resigned in protest at the club's transfer policy when Uruguayan midfielder Ignacio Gonzalez was brought to the club on the final day of the summer transfer window against his wishes.

Announcing its decision, the panel said in a statement: "We declare that Kevin Keegan was constructively dismissed by Newcastle United Football Club Ltd, for which Newcastle United Football Club Ltd must pay to Kevin Keegan damages in the sum of £2 million plus interest to be assessed if not agreed."