Preservation of First Division status, Scottish Cup exploits and economic trauma. The First Division was tight and safety was only assured at the eleventh hour. Paul Sheerin left for Ayr United and Richard Hastings went to Ross County. Arrivals were Paul Bradshaw, Russell Duncan, Paul Ritchie and Nicky Walker. Bradshaw’s career was to be short but the rest became established first team players. In July Sharp were unveiled as the new shirt sponsors then the transfer of Caledonian Stadium to a Charitable Trust was completed – the debt of £2.6 m was wiped out as a result. General Manager Gary Thompson left for personal reasons.

At the Keyline Tournament in Oban on 14 July the team came second to Clyde then played six pre season friendlies. The start of the league campaign was hard - by the end of August the team were last but a month later had climbed to sixth. The Bells Challenge Cup campaign lasted two matches – both went to extra time. Forfar were beaten 3-2 at home then it was down to Alloa and defeat by the same score. The CIS Insurance Cup started with a trip to Albion Rovers on 11th September. News of the US World Trade Centre attack came through during the trip south and this overshadowed the 2-0 victory. The North Cup final on 22 September was lost 2-0 to Clach while the senior team were being demolished 6-0 at Airdrie. Partick came north for round two of the CIS Cup and were beaten 4-2 on penalties after a 3-3 draw. The third round took place on 9th October at Dunfermline and led to the first premier scalp of the season – a 1-1 draw then 4-1 on penalties. The best league result in October was a 5-1 home win against Clyde – by the end of the month third place had been achieved. In late September Steve Paterson was touted in the press for the vacant St Johnstone manager’s post but speculation ended with the appointment of Billy Stark.

There were two league victories in November – 5-1 at Raith then 3-0 against Ross County at home. The Raith game saw the first goalkeeper substitution - Jim Calder replaced Nicky Walker in the 77th minute. There then followed two visits to Ayr in five days. A 3-0 league defeat was followed by the quarter final of the CIS Cup. After a ninth minute Ross Tokely goal it all went pear shaped. Tokely was sent off a minute later and a lively Ayr side tore the ten men apart. In the end it was 5-1. December saw a mixture of league fortunes but they turned the year in fifth place. At the AGM of the PLC on 13 December the Chairman mooted a move from East Longman to somewhere more central to give easier access and hopefully attract more fans. It was not long before rumours started of a sale of the site to ASDA and relocation to the Bught Park.

January started with weather problems and a delayed Scottish Cup third round match away to Arbroath – a narrow 2-0 victory earned a lucrative away match against Hearts. This took place on the 26th and the road south to Edinburgh was filled with 3000 Inverness fans. On a dreadful pitch Caley Thistle were magnificent and Hearts were well beaten 3-1. Tokely, Wyness and Bagan were the heroes with spectacular goals. There were only two league games played in January because of frozen pitches – Raith were hammered 5-0 at home but it was 3-0 for Airdrie away. It was all enough for Steve Paterson to be named Manager of the Month.

February league games produced a win, draw and defeat leading to fourth place. February was dominated by the build up to the Scottish Cup quarter final tie away to Partick Thistle on the 23rd. It was another exciting awayday for the fans which ended 2-2. Caley Thistle were in the lead twice but Partick fought back to earn a replay. This took place on 5th March in Inverness on a very wet night. To the disappointment of the home fans Partick’s Scott Paterson scored the only goal. It was back to the League and the fight against relegation. Squad reductions began and Mike Teasdale and Les Fridge both moved on in March. This was catch up time with six league games being played during the month. By the end of the month the team lay fifth after two wins, one defeat and three draws. It was then down to Ayr on the 6th April with both sides needing a victory to be safe. Ayr won 1-0 and safety was not assured until a home 1-1 draw with Clyde the following week.

On the 17th April there was drama at an EGM of the PLC called to discuss a £150000 debenture issue. A shareholders’ vote against the plan was taken as a vote of no confidence and the Board resigned en masse. David Sutherland had already announced his intention to stand down as Chairman and Ken Thomson was leaving the Vice Chairman’s post. After numerous meetings the crisis was ended with an announcement on 29th April that Tulloch were to purchase a 51% controlling interest in the Club – major shareholders were agreeable in principle but a full shareholders vote would still be required. The football ended on 27th April with a fine 3-0 home win against champions Partick and a creditable sixth place in the league.