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Manchester United's owners the Glazer family have been hit with a steep rise in their annual debt payments after the club exceeded a limit on their overall borrowings which form part of their controversial PIK loans agreement.

The Glazers used the high interest form of financing to help raise the funds for their £790m takeover in 2005.

But the loans, originally worth £265m and taken out with three hedge funds – Citadel, Och Ziff and Perry Capital – but reduced to £138m as part of a 2006 refinancing, include strict covenants relating to net debt levels and the club's earnings, reports the BBC.

Failure to meet the borrowers' terms by August 16 meant the annual interest rose from 14.25 per cent to 16.25 per cent.

Analysts predict the annual payment will now increase to about £38m, up from £25m last year. Because the interest on the loans is "rolled up" and added to the original sum borrowed, the Glazers will owe about £267m on the PIK loans by 2011 – almost a £100m increase in only five years.

And although Manchester United are not directly liable for the PIK loans as they sit on the accounts of the club's parent company, Red Football Joint Venture Ltd, the sharp rise will add to fans' concerns over the American family's ownership.

It will also raise fears among supporters that the Glazers will soon use the club's revenues to start paying off the PIK borrowings.

Duncan Drasdo, a spokesman for Manchester United Supporters Trust (MUST), said: "The Glazers' PR people claim this PIK debt is nothing to do with Manchester United but we believe in the next 12 months accounts will start to show them taking even more money out of our club.

"They've already wasted more on interest and fees than the total sum of all season ticket money paid by every supporter in their entire five-year ownership.

"Imagine what we could achieve if released from the millstone of the Glazers' ownership."