Keegan, who left St James' Park a year ago, is claiming £8million for constructive dismissal while Ashley has put in a counter-claim of £2m for breach of contact - and talks to find a middle ground have failed.
Tomorrow a Premier League arbitration panel will sit in judgement, with fears that the dispute could even go to the High Court.
According to The People reporter Alan Oliver: "Keegan's £8m claim, Newcastle's overdraft facility with Barclays Bank, and the massive £60,000-a-week players like Alan Smith, Joey Barton and Geremi are on at St James' Park have been put forward as three of the main reasons why Ashley has not be able to sell Newcastle for £100m."