Bruce's search for young British talent has been a frustrating one

The 46-year-old told BBC Radio 5live that club academies were failing to produce top players and warned: "It's going to be a downward spiral now."

He added: "Where are we producing the players? We've got all these academies. But I don't think they are working.

"There seems a dearth of young talent. We're not producing like we used to."

Interview: Birmingham boss Steve Bruce

With England facing Germany in a friendly next week ahead of crucial Euro 2008 qualifiers against Israel and Russia next month, Bruce admits he fears for the future of the national side.

606: DEBATE Are academies failing young players? Is there a dearth of young British talent? SL

"I can't see the development of the young players and where are the young British players?" he said.

"I'm after a young midfield player and we're scouring, scouring and scouring the lower divisions and the Championship but there seems a dearth of young British talent."

Bruce has signed nine players this summer as he bids to keep Birmingham in the Premier League, but only four - Fabrice Muamba, Garry O'Connor, Stuart Parnaby and Liam Ridgewell - are British.

He is a very good coach... of course he is going to stay Carson Yeung on Bruce

Meanwhile, City's new majority shareholder Carson Yeung has told Bruce that he is to remain in charge at St Andrew's.

Hong Kong-based businessman Yeung, who is poised to press ahead with a full takeover of the club in the near future, met Bruce for the first time this week.