Any club spending an entire season in administration will be relegated

The Football League has announced plans to revolutionise the game outside the Premiership.

A meeting of Football League chairmen at Leicester City's Walkers Stadium resulted in three major proposals being agreed in principle.

Following the meeting, Football League chairman Brian Mawhinney revealed that clubs who fall into administration would be docked points or possibly relegated.

In a bid to fight off the increasing trend of administration, Third Division clubs will have their wages capped as a percentage of annual turnover from next season.

Those regulations will be extended to Divisions One and Two in time for season 2004-05.

The League also agreed to proposals to extend the Football League play-off tournament to six teams from next season.

Mawhinney suggested the wage capping and play-off decisions would be ratified at the League's annual meeting on 5 June, with an extraordinary general meeting set to be arranged for ratification of punishments for clubs who enter administration.

"These are three significant developments," Mawhinney said.

"The clubs understand this relates to moving football forward under the umbrella of good governance."

The proposals were drawn up by the League's insolvency working party consisting of Mawhinney, Millwall chairman Theo Paphitis, Wycombe chairman Ivor Beeks and members of the League executive.

The plans were put on the table following concerns that clubs have used administration as a way of escaping debts, thereby gaining an advantage over their rivals.

Leicester had 90% of their debts to the Inland Revenue wiped out when they went into administration.

Construction company Birse is believed to have lost about �7m in unpaid bills from building the Walkers Stadium.

The Foxes have since relaunched under a new consortium and Mawhinney's working party proposes penalising repeats of such a strategy.

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In addition to Leicester, Notts County, Port Vale, Ipswich, Barnsley, York and Huddersfield have all been in administration this season.

But clubs entering administration could now face an immediate deduction of between six and 12 points, or even relegation at the end of the season.

The Football League is concerned that an increasing number of clubs choosing to go into administration could harm football's image.

Dr Bill Gerrard, a specialist in sports finance at Leeds University Business School, said: "Some people in football are upset that clubs are going into administration, getting rid of their debt and then gaining a benefit over their rivals.

"This has been highlighted by the case of Leicester where there may be sporting advantages to going into administration in that you lose your debt burden."