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Joe Royle told the club website that Clarke is being sent to Layer Road to gain first team experience: "Billy will be going to Colchester for a month and it will be a good chance for him to get some first team experience.
"It's just a month on loan and no more than that. Billy is very highly thought of here and it will be a good opportunity for him to get a run of games under his belt."
The U's manager, Phil Parkinson told their club website that Billy "will give us a spark," and he could be in line to feature as early as Saturday against Scunthorpe.