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Uefa introduces tough penalties for spendthrift clubs

Portsmouth's financial meltdown has highlighted the problem

Profligate clubs face being banned from the Champions League and Europa League after European football's governing body Uefa approved new plans.

The example of Portsmouth, who became the first Premier League team to go into administration, has highlighted the financial excesses in England.

Uefa president Michel Platini has now passed rules which would force clubs to operate within their means.

Clubs will only be able to spend what they themselves generate.

Big cash injections from wealthy benefactors like the owners of Chelsea and Manchester City would also be restricted under Uefa's Financial Fair Play plan.

The system is being phased in and bans would not be able to be imposed theoretically until the 2014-15 season at the earliest.

Clubs are required to restructure themselves over the next three seasons so they are financially solvent.

Uefa general secretary Gianni Infantino said: "The main rule is the break-even requirement which will be phased in over the next three years.

"It is not as easy to swallow for everyone but everyone understands it is necessary. They are there not to punish clubs, they are there to help clubs. We don't want to kill anyone, this is why we have a phased-in approach."

But money invested in stadiums and youth development will not be included in the number-crunching.

The rules will also forbid clubs owing money to their rivals, players and staff or the tax authorities at the end of the season.

Portsmouth were a glaring example of a club which owed millions in unpaid transfer fees, image rights, tax and VAT.

Earlier this year, Infantino estimated 50% of clubs in Europe were making losses and 20% were in financial peril.

Big transfer fees can still be paid but clubs will need to generate sufficient funds through ticket sales, TV money and commercial revenue.

"If clubs want to spend €50, 60 or 70 million, why not, provided they have the money coming from their revenues, this will continue in the future. The problem is when you don't have the money," Infantino added.

The European Clubs' Association's president, former German international Karl-Heinz Rummenigge, welcomed the move, commenting: "The measures will shape the future of European football into a more responsible business and ultimately a more sustainable one."