A number of City banks have demanded that the Premier League introduces new rules over the way football clubs run their financial affairs.

If satisfactory regulations are not implemented, the banks have threatened that they will not agree to hand out any further loans.

One of the proposed new rules could see the introduction of a relegation clause. The City banks have voiced their concern over the Premiership’s proposals to issue a nine-point penalty to clubs who slip into administration.

The banks argue that a penalty of such measures would seriously increase the likelihood of the club in question being relegated – meaning less chance for the banks to recover funds.

Also in the firing line is the way players’ contracts are drawn up.

Currently, footballers are given priority creditor status when a club goes into administration.

So far, the clubs have been forced to pay players’ wages and any outstanding transfer payments in full – although, in some cases, players have agreed on pay cuts.

The lack of legal cover offered to the creditors has been criticised by administrators, as it leaves them with limited funds to restructure a troubled club.

According to some estimates, around £400m has been loaned to Premiership clubs.

The news comes as shares in Leeds United football club – currently lingering at the bottom of the Premiership – were frozen as the club attempts desperately to find it a new owner and clear its debts of around £80m. Details: www.leedsunited.com