The local government of Valencia, one of Spain's most cash-strapped regions and owner of several infamous public white elephants, has added a La Liga football club, Valencia, to its portfolio.

With local health and education services hit by austerity programmes, the regional government's effective takeover of Valencia and its squad of highly paid soccer players has provoked fury. But it became inevitable after the club defaulted on interest payments on an €81m (£68m) loan which was only granted after the regional government offered to stand as guarantor. The total debt is now €86m. The acquisition presents yet another administrative headache for the regional government, whose properties include the new but unused airport of Castellon and a hospital at Lliria that it cannot afford to open.

The regional government, which has long been run by Spanish prime minister Mariano Rajoy's People's party (PP), part-owns two local second division clubs, Elche and Hercules, which also failed to service their debts. In all, it guaranteed football club loans of about €110m in 2009 and 2010, a time when Spain's public finances were in deep trouble. It is unclear how the authority, which has said it will try to sell the club as soon as possible, will service the loans because its own debt has been given junk status by ratings agencies, effectively shutting it out of the markets. The money is owed to Bankia, which is owned by the Spanish state after being rescued with €20bn loaned by the eurozone's rescue funds."We are aware of the importance that Valencia CF has to Valencian society and we will work so that the club can go forward in the best possible fashion," said the regional government's deputy head, José Císcar.

There was no mention of selling stars such as striker Roberto Soldado or promising youngster Sergio Canales, part of a team that is seventh in the Spanish league. Valencia was the first region to ask for bailout money from central government in July when it required an estimated €2.5bn to help it get through 2012. It is expected to ask for more this year.Photograph: Pierre-Philippe Marcou/AFP/Getty Images