City managing director, Bob Gray, issued a statement following the PFA message which suggested that players at the club had not been paid.

The PFA had also advised the Football League of outstanding payments and the Football League have now placed Chester on a transfer embargo.

Gray's response said: "All the current players who are contracted for next season have been paid up to date.

"It has been widely publicised that we are in dispute with Paul Butler and Tony Dinning and we have made arrangements to meet officials of the Football League to sort out this shambles.

"I think it is shabby that the PFA have seen fit to release a statement on their website, when they are in full possession of the details of our proposed meeting.

"We have taken legal advice and we shall vigorously defend our stance in the Butler/Dinning dispute."

The PFA confirmed that the restriction on signing new players had been placed on the club.

Club owner, Stephen Vaughan, reinforced Gray's comments about the issue.

Vaughan said: "I think it is extremely disingenuous of the PFA to highlight this case on a public website and insinuate that all of our players have not been paid, which is totally untrue.

"We will be seeking an urgent meeting with the PFA and ask them for an explanation of why they see fit to place this information into the public arena.

"At a time when I am endeavouring to give employment to PFA members it's annoying that this type of article emerges."

The PFA website read: "The PFA has given financial assistance to the club to assist with players' wages.

"The majority of the players at the club have not received any payment for two months, or more.

"The PFA have, therefore, advised the Football League of the monies outstanding to the players, and the Football League has applied Regulation 46.1 and placed an embargo upon the transfer of any registration by the club until such times as the payments due to the current playing staff are made."

The embargo means that Chester's signing of 22-year-old Yeovil midfielder Anthony Barry on Thursday may now be in doubt.

Meanwhile, Blues boss Simon Davies, was today due to have talks with former Accrington Stanley midfielders David Mannix and Jay Harris.

Mannix is a former Liverpool trainee who joined Accrington on loan in November 2006, and then joining the club on a permanent basis earlier this year when he made 12 appearances.

And Liverpool-born Harris, 21, is a former Everton trainee who joined Accrington in July 2006, and made 73 appearances before being released.

- Chester have organised a pre-season friendly at Welsh Premier League club, TNS, at Park Hall's new artificial pitch on Tuesday, July 8 (7.30pm).