Shaw claimed the club's financial state is a direct result of the demise of ITV Digital and is hoping to set-up a campaign aimed at persuading fans to donate money.
Shaw said: "This is a real crisis point in the club's history. It's heartbreaking to think if we don't raise the money Watford would cease to exist but that's how it is.
"We simply have to reduce the wage bill as the major way to achieve this."
"If we can't construct a firm plan to cover the gap in the next few days, the club will unfortunately have to go into administration," said chief executive Shaw.
The club's sad financial state was emphasised in August when they sold their ground for £6million to an unnamed buyer, just six months after buying it back.