Football League clubs to include home-grown quota

The 72 clubs voted on the new rule as one of a number of changes at their annual general meeting in Malta yesterday.

Other new rules will see clubs being hit with a transfer embargo if they do not file their financial accounts in time, but a proposal by Leyton Orient to impose a relegation of two divisions for any club going into administration was rejected.

League chiefs will however review the punishments for administration to see if they need toughening up.

Under the home-grown rule, clubs' first-team squads will be restricted to 25 players over the age of 21, of which 10 must have been registered in domestic football for three seasons before their 21st birthday. There will be no restriction on players under the age of 21, however.

Football League chairman Greg Clarke said: "This has been a positive and constructive meeting at which we've looked at many of the important issues currently facing football and taken steps to address a number of the most pressing governance concerns."

The League's fit and proper person's test has also been re-titled the 'Director's Test' to fall in line with the other football bodies.

The clubs have also closed a loophole so that clubs that go into administration are hit with sporting sanctions even when the club is part of a group company.

The new financial reporting rules will see the transfer embargo imposed on clubs that fail to lodge their accounts with the League at the same time they are required by Companies House.

Sports minister Hugh Robertson has called the rise in Premier League wages "very worrying" but insists the Government should not intervene to force Premier League clubs to cut spending on player wages.

A new report by analysts Deloitte shows wages at top-flight clubs have risen by 11 per cent to 1.3bn overall, while the Premier League has been overtaken by Germany's Bundesliga as the most profitable league.

Robertson said the Government would put pressure on football's governing bodies to tighten up on bad financial practice but that they would not introduce legislation to force them to – though he did not rule that out for the future.

Robertson said: "The concern is that the operating profits have halved and the wages bill has increased and we will be pushing football's regulatory authorities very hard to take some action.

"This report points to a very worrying problem and we are very keen to see action in four areas: financial transparency, the relation of debt to turnover, the fit and proper person test and more independent governance on the board.

"It is absolutely right that we should give football the first opportunity to sort this out," he added.

The Deloitte report shows Premier League clubs' overall operating profits fell to 79m, their lowest level since 1999-2000 and half that of the Bundesliga.

The Premier League still generates by far the biggest revenues – at 1.98bn still 500m ahead of the Bundesliga.