Manchester United have run up huge debts under the Glazer family
A group of MPs wants the Football Association to stop prospective owners from saddling clubs with huge debt.
The report highlighted Liverpool and Manchester United's debts of over £350m and £750m respectively and said debt was "a matter of great concern".
It said there were "severe doubts" about the sustainability of debt levels in the medium and long term.
The all-Party Parliamentary Football Group report also said it penalised clubs who lived within their means.
The group also called for a tightening up of the FA's Fit and Proper Persons Test for potential club owners, saying that debt plans should be taken into account, and that proposed takeovers should be rejected "where it is considered against the long-term interests of the club".
The MPs, who have no power to enforce any changes, also want loans to clubs to such as Chelsea's Roman Abramovich to be treated as debt.
The group, chaired by Feltham and Heston MP Alan Keen, conducted a wide-ranging report into all aspects of the game in England, including finance, supporter representation and the development of the national game.
Witnesses at the hearings, which took place over a seven-month period last year, included representatives from the Professional Footballers' Association, FA, Premier League, the Football Supporters' Federation and members of the media.
Other topics addressed by the group included nurturing home-grown players, fan representation on club boards, disabled supporters and women's football.
If we wish for the fortunes of our national team to improve, we must ensure young domestic talent is given the opportunity to get experience at the top level
All-party Parliamentary Football Group report
It also wants the Football Regulatory Authority to be strengthened and be responsible for the proper persons test.
The report was particularly concerned by the number of overseas players in English football, and suggested the adoption of the 6+5 rule proposed by international governing body Fifa.
Under that plan, at the start of every game, each club must field at least six players who are eligible to play for the national team of the country of the club.
Other highlights of the report included support for the establishment of an FA Women's Super League, encouraging an affordable season-ticket policy and better access to council-owned pitches for junior players.
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