EFL admits it cannot dock points from Leeds United's promotion rivals for Premier League overspending

The decision was prompted by "urgent legal proceedings" against the Football League (EFL) and Premier League by the Championship club, who appear to be the next in the crosshairs of English football's financial fair play clampdown.

Relegation-threatened Everton and Nottingham Forest this season became the first Premier League clubs deducted points for breaching its financial fair play rules, known as profit and sustainability rules (PSR)

On Friday it was announced Sheffield United will be deducted two points in next season's Championship (assuming they are relegated to it) not for overspending, but for not keeping up on their transfer instalment payments.

The Premier League referred Leicester to its disciplinary commission after three years of spending aimed at finishing in its European places resulted in relegation. The Football League have put them under a transfer embargo.

Leicester are top of the Championship with a game in hand on Ipswich Town, behind them on goal difference, and Leeds United, a point further back.

They questioned whether the Football League's rules allow it to deduct points from Leicester if ordered by a Premier League disciplinary commission. After legal advice, the EFL confirmed that "whilst it would want to respect any decision of a Premier League disciplinary commission (and vice versa) to deduct points in the EFL”, it cannot.

Traditionally, the two leagues only punish their own members, which is why Sheffield United's deduction would be delayed if they were to avoid relegation this season.

Leciester have applied to a Football League arbitration panel accusing the League of "conspiring with the Premier League to use unlawful means and to procure or induce a breach of contract by the Premier League" in relation to its proceedings against them.

They have also applied for an interim injunction to prevent the Football League from imposing a sporting sanction this season, but this has been made redundant by the conclusion they cannot.

The Football League noted that "Leicester City sent no letter before action and issued the proceedings without notice."

A statement from the Foxes read; “LCFC continues to try and co-operate constructively with both the Premier League and the EFL to reach a lawful resolution of any issues relating to PSR, in accordance with our consistent commitment that any charges against the club should be properly and proportionately determined, in accordance with the applicable rules, by the right bodies, and at the right time."