James Hird insisted he be paid during 12-month suspension

UPDATE: ESSENDON is resisting calls to stop paying James Hird as the stand-off with the AFL threatens to reach crisis point.

ESSENDON is resisting calls to stop paying James Hird as the stand-off with the AFL threatens to reach crisis point.

The Herald Sun understands that the AFL has pressured the Bombers to cease payments to Hird, after chief executive Andrew Demetriou asserted on Wednesday that the coach was not being paid and under the drugs scandal sanctions he could not be.

The club is believed to hold concerns that it cannot break its $1 million a year contract with Hird, which does not expire until the end of 2016.

AFL claims that a verbal guarantee was given by Essendon not to pay Hird are also disputed.

Frantic negotiations are under way regarding the issue after the AFL last night issued the club with a "please explain".

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A refusal to stop paying Hird would be a direct challenge to the authority of the AFL and presents a major issue for Demetriou.

The AFL chief said this week if Hird continued to be paid by the Dons they could face further sanctions.

The Herald Sun revealed Hird was being paid through Essendon, despite Demetriou's insistence that the Bombers were banned from paying him as part of the AFL Commission sanctions ruling over the Bombers supplements program.

On Wednesday, Demetriou said: "He's not allowed to be paid - I want to make that very clear ... If there is one thing I will go to my grave on, I know 100 per cent the AFL is not paying and I know that - Essendon is not paying".

News_Rich_Media: Reports have emerged suggesting former Essendon coach James Hird was offered a peace deal to drop his legal case against the AFL.

Asked to produce evidence of Hird's pay ban, AFL spokesman James Tonkin conceded there was nothing in writing.

"Subsequent to sanctions being handed down, the specific terms of James Hird's 12-month suspension were outlined in conversations with his employer, the Essendon Football Club,'' he said.

But it is also understood Hird made it clear during final negotiations that there was no agreement unless he was paid.

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AFL bosses and Essendon chairman Paul Little were working to resolve the fresh crisis yesterday afternoon.

Demetriou said on Wednesday the Bombers would face further sanctions if Hird was being paid by the club.

News_Rich_Media: AFL boss Andrew Demetriou has strongly denied an offer was made to James Hird to encourage the former Essendon coach to accept punishment for his involvement in the club's drugs scandal.

Amid calls for an independent inquiry into the AFL-ASADA handling of the Essendon drugs probe, federal Sports Minister Peter Dutton is seeking clarification on the role of the chairman of the Australian Sports Commission, John Wylie.

The Herald Sun revealed on Wednesday that a guaranteed salary for Hird during his suspension was among several inducements presented to the coach amid secret negotiations between Wylie and Bombers chairman Paul Little four days before the commission was due to rule on sanctions.

Victorian Sports Minister Hugh Delahunty said yesterday he was aware Mr Dutton was making inquiries, and was watching the case closely.

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Former Essendon footballer and state sports minister Justin Madden said: "The whole system needs a shake-up, big time.

"The integrity measures at the AFL need a shake-up, and that also goes to the way in which the agencies themselves deal with the AFL."

Hird would not comment as he left his Toorak home this morning.

"I'm not allowed to, I'm sorry," he told the Herald Sun.

- with Ashley Argoon, Peter Rolfe

News_Image_File: James Hird at his Toorak home this morning. Picture: Nicole Garmston