The new stadium is planned for land near Ninian Park

Cardiff Council had given the club a 90 day deadline to prove it was viable and a business plan has now been submitted.

The council's chief executive said "significant progress" had been made and has recommended that the deadline be extended to 31 May.

The club, which last season faced a financial crisis, said it was "totally confident" in its business plan.

It plans to build a 30,000-seat stadium, which could rise to a 60,000 capacity, on land at Leckwith, near the club's current Ninian Park ground.

Integral to the scheme is securing retail development. American discount store group CostCo has signed a contract to become a tenant but other stores are needed to join the project.

In January, Asda was unveiled as the cornerstone outlet for the retail development behind the proposed stadium.

The council's executive, meeting on Thursday, will be recommended to grant extra time because of the "strength of the information provided" in the business plan.

Council chief executive Byron Davies said: "Significant progress is being made and on this basis the deadline has been extended to allow us to work with the club on a robust evaluation of the business plan.

"Both Cardiff Council and Cardiff City FC are aiming to deliver a stadium and we are working towards a financially viable plan that explores all options for income streams to deliver that ambition and a further report will be submitted to the executive in April to monitor progress."

Earlier this year, the council expressed doubts that the stadium was viable and asked for a detailed business plan.

The club submitted a business plan which had been assessed by football finance experts before being handed in.

I am totally confident that the business plan will satisfy any outstanding issues Sam Hammam, Cardiff City FC owner

The council will now work with Deloittes, who are also recognised experts in football finance matters, who will advise on the viability of the plan.

One of the pre-conditions is a requirement for the club to demonstrate that it is financially strong enough to see the project through to completion without further financial assistance from the council.

The club last season faced �30m debts and sold several players in an effort to reduce wages and it is experiencing low crowd turn outs.

Councillor Rodney Berman said: "Its fantastic news that things are moving forward I'm very pleased that the chief executive is able to recommend to us a two month extension to the existing deal.

"We shouldn't underestimate how far we have come with this project".

Club owner Sam Hammam said: "I am totally confident that the business plan will satisfy any outstanding issues.

"I now look forward to the new stadium becoming a reality."