Rochdale's new owners are to pull out of their takeover after an investigation was launched into the acquisition of the Sky Bet League Two club, the English Football League has announced.

The proposed takeover of the Greater Manchester outfit has been a subject of bitter controversy with Rochdale MP Tony Lloyd among those criticising the intentions of the club's new owners Morton House MGT.

The EFL issued a statement on Saturday, saying:

“On 16 August 2021, in accordance with its regulations, the EFL issued notice to multiple individuals of the commencement of disciplinary investigations in respect to the acquisition of shares in Rochdale Association Football Club.

“It is alleged that Morton House MGT acquired control of the club, and a number of individuals became relevant persons without the prior consent of the EFL in accordance with the Owners' and Directors' Test (OADT).

“The EFL's objective was to gather additional evidence as it continued to investigate whether the club, any official, any relevant person(s) and/or any persons wishing to acquire control of the club complied with the requirements of the OADT and whether any relevant person(s) are subject to a disqualifying condition.

“Having considered the request for information made of them, Morton House MGT, on behalf of its directors, and representatives, has now informed the League that it is formally withdrawing from the approval process and plans to divest the shares acquired in the club at the earliest opportunity."