The decision was taken at the league's AGM after a business plan put forward by the consortium negotiating a potential takeover failed to convince officials.

Gretna, whose entire staff were made redundant by administrators days after their debut Scottish Premier League season ended, will be expelled from the league if a buyout is not completed after the weekend.

The club's spectacular fall from the top flight to the bottom tier means promotion for the SFL's two losing play-off finalists - Airdrie move into the First Division and Stranraer leap to the Second.

Gretna remain unlikely to replace Stranraer though as it became increasingly clear that the group interested in a purchase lacks the means to solve the club's debt problems.

Paul Davies, who works for a football agency in Glasgow, has been heading negotiations with Wilson Field, the insolvency experts who took over the running of Gretna in March.

SFL officials have held talks with Davies and joint-administrator David Elliot this week but they failed to prevent Gretna sliding further towards the abyss.

No guarantees were given over finances, fixtures or the club's stadium, which does not meet First Division standards, and the decrease in potential revenue sparked by the double demotion makes a buyout even more unlikely.

David Longmuir, the SFL chief executive, said: "Gretna were admitted to the Scottish Football League last Friday and today we have decided to invoke a rule to relegate Gretna to the Third Division.

"We have done this in consultation with the administrator and we have had a very good working relationship with him. He has agreed with the decision.

"A lot of it was based on, first of all, the administrator telling us that he did not see a sustainable business plan from the third party trying to buy Gretna.

"We also looked at the business plan and we agreed. We found many fundamental flaws with the business plan.

"We also have to recognise that there has been no work done on Raydale since 2006.

"There were a number of other issues around the areas of football debt, and UEFA and SFA rules on football debt, that the third party was unable to quantify and therefore give total clarity on how he was going to handle those debts.

"Therefore, we decided the risks were far too high."

The league will invite applications for a new club to join the SFL if a takeover is not completed by the "very early point of next week".

Longmuir said Elliot believed he still had a party who may be interested in taking Gretna forward as a Third Division club.

"That remains to be seen," he added. "But we had to make sure we protected the integrity of our league."

The future now looks bleak for Gretna, who took just three years to jump from the Third Division to the SPL, and plummeted straight back down after a two-hour Hampden meeting.

Their financial problems came to a head in February when owner Brooks Mileson withdrew his funding following illness, leaving them with a debt approaching £4million.

Airdrie manager Kenny Black has no qualms about benefiting though after the Second Division runners-up lost a play-off final to Clyde.

Black told PA Sport: "Somebody up there likes us. We haven't had much luck recently so I'm delighted.

"I have sympathy with the people at Gretna, the players, the staff and the fans. But the SFL gave them as long as they could."

Airdrie chairman Jim Ballantyne added: "It's a sad day for Gretna but we have benefited from it and we will accept it.

"But the decision didn't come as a total surprise to us, as a business you have to be aware of all eventualities and it was always in the background.

"We have been in the First Division before for a few years and it's a totally different ball game. What we need to do this time is consolidate.

"Kenny Black and I have meetings almost every day and we will get together and plan for next season. Obviously the budget will be higher in the First Division but we still have a bit of balancing to do."