Birmingham manager Alex McLeish has revealed his transfer warchest has been slashed after club chiefs re-evaluated their spending power.

The Blues boss admits owner Carson Yeung and the board have decided to cut his budget despite claiming they would provide him with up to £40million when they took over in October.

McLeish takes his team to Portsmouth tonight knowing Premier League safety is all but secure, with Blues sitting ninth on 40 points.

The Scot is already making plans for a summer rebuilding effort but reveals the cash on offer won’t be near the megabucks previously touted.

He said: “I don’t think the board will be willing to spend that kind of money. Having come in, seen how it works and others club’s plights, Portsmouth for instance, they’ve thought ‘wait a minute’ and maybe they have taken a step back and had a look at things.

“We probably need to spend a wee bit more than we did last year to maintain what we’ve done this season. If we want to remain a Premier League team season after season you have to keep up with the Jones’s.

“Bringing in the more creative players costs money, but I think if I see the right player and I can convince the board he is the right man for us I believe I will get the backing.”

But McLeish insists the reduction has nothing to do with Blues posting a pre-tax loss of £20.5million for the year ending 31 August 2009 last week.

He said: “No one has said it will affect things. We were talking about £20million in January and I only spent £6million, I would imagine £14million plus should be reasonably healthy.

“We need to improve again and enhance the squad in forward areas. We need to add to the quality, these areas are not cheap.

“We spent about £15million-£16million and that was for six or seven players, to get that this summer will be well nigh impossible unless we get four or five Bosmans.”

Blues go to Fratton Park tonight following their 2-0 FA Cup defeat at Pompey on Saturday and McLeish is set to hand January signing Michel his first start.

He added: “We have to have a look and see what he can do. He has a lack of match practice along with one or two others.”