Birmingham City chairman David Gold has warned Matthew Upson his Premiership dream could be short-lived following the defender’s bitter exit from St Andrew’s.

Upson, who is desperate to play in Europe and regain his England place, returned to the top flight yesterday when he signed a four-and-a-half year deal with West Ham United.

The transfer netted Birmingham at least #6 million and potentially #7.5m but also deprived them of one the final ‘crown jewel’ left over from last season’s relegation campaign.

It also brought to an end an increasingly fractious relationship between the central defender and the club that, four years ago, offered him a lifeline when he was marooned in Arsenal's reserves.

After joining in January 2003, Upson played a huge role in keeping City in the Premiership for three seasons and was out with a long-term injury when they dropped into the Championship last May.

From that moment, speculation began to mount that he would follow Emile Heskey, Jermaine Pennant and David Dunn and leave the Midlands, which only intensified when Upson and his agent became agitated by Birmingham’s refusal to sell him.

The discord finally ended late yesterday when the Birmingham board reluctantly accepted West Ham’s third offer for the 28-year-old, much to the disappointment of Gold.

Describing his sadness at the way things had worked out, the chairman admitted that some would see the decision to go as a strange one, given that the clubs are separated by just four places on the football pyramid.

"I have always found him a consummate professional, bright and intelligent but I guess he is in a hurry, he will be playing in the Premiership next week," said Gold.

"But for how long? That’s the interesting thing. I could make a case that Matthew could be playing in the Championship with West Ham and Birmingham City could be playing in the Premiership. That is an incredible irony, but it is possible.

"I wouldn’t get any personal satisfaction out of that, but I know those that would."

Given the Londoners’ perilous position – mired in the relegation zone and two points from safety – Gold also questioned Upson’s decision.

"I guess at the last moment, the club that met our valuation was West Ham. I am hugely disappointed that he is not a Birmingham City player today, just because of his qualities which will be missed."

But Gold stressed that, given Upson’s continuing refusal to sign another contract, Birmingham had little choice but to realise his transfer value before he was allowed to leave on a Bosman free transfer in the summer of 2008.

"We want players that want to play for Birmingham City – and not just for three months, but forever," he said.

"We want them to play in this division and then in the Premiership when we get there. All of those things are our requirement and, sadly, I don’t think Matthew fitted within those parameters any more.

"I wish this had not happened, I wish Matthew could have kept this until the end of the season when it would have been fair and equitable on everybody."

Gold assured the club’s supporters that until the loan deadline expires in just over a week, he would scour the Championship in an attempt to bring in a fourth centre-back to the club.

He also expressed his sympathy for manager Steve Bruce, who recently elucidated his worry that Upson’s departure would have a negative impact on the rest of the team.

"I feel for Steve in the sense that he has done everything in his power to keep Matthew. Steve is hugely disappointed and I understand that but I am absolutely not concerned that this might damage the board’s relationship with Steve."

On a positive note, Birmingham yesterday turned Sebastian Larsson’s loan into a permanent transfer.

The club agreed a four-year contract and will pay Arsenal #1m, despite the fact the midfielder’s existing deal was due to expire in the summer. But Larsson’s value has increased massively since he arrived at St Andrew’s in the summer and put in a string of vibrant performances.

The Sweden Under 21 international has demonstrated his versatility by playing in defence and midfield and added goals with six in 34 matches. That includes one in each of the last three games, including a spectacular free-kick in Saturday’s FA Cup defeat to Reading.

"We are delighted," Bruce said. "Seb is young, hungry and ambitious and he epitomises the type of player we need to push this club forward."

Bruce has also signed 21-year-old Patrick Kavanagh on a six-month contract, after he featured in two reserve games, scoring a goal on his debut against Port Vale in December.

The Irish winger spent the second half of last season with Eircom League Premier Division side UCD and his former UCD team-mate, Gary Dicker, joins him after a completing a successful trial.

Marcos Painter has agreed to move to League One side Swansea City for #50,000. The 20-year-old, a product of the City academy, has been on loan at the Liberty Stadium since mid-November.

Birmingham booked an FA Youth Cup quarter-final meeting with Manchester United after beating Barnsley 2-1 at Oakwell last night.

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