Culture secretary Tessa Jowell told the Commons on Wednesday that Birmingham remained an alternative if the plans fell through.

She added that it remained possible that no national stadium would be developed at all.

Government troubleshooter Patrick Carter, whose report on the project was released on Wednesday, was also cautious.

"I believe we now have the prospect, but not yet the certainty of delivering a national stadium at Wembley," he said.

The project, which could cost as much as �700m, has been dogged by financial and political problems.

However, FA chief executive Adam Crozier said he was confident plans for a new national stadium at Wembley would be finalised by the end of April 2002.

He said the new 90-000 seater Wembley will be able to stage athletics, with the use of a specially-fitted platform if required, as well as football.

Crozier said the FA, Sport England and the government have agreed the following:

Aston Villa chairman Doug Ellis, a member of the FA and leading supporter of the Birmingham bid, labelled the move "disgraceful."

"I believe Wembley is the next Millennium Dome. There will be a lot of tears if they continue with this project," he said.

But England team coach Sven-Goran Eriksson welcomed the proposals.

"I am very excited about seeing an England team playing once again at the home of football," he said.

Meanwhile, shadow culture secretary Tim Yeo criticised the "dithering and blundering of successive ministers."

He said Britain's reputation in international sporting circles had never been lower.

Coventry's bid team were "extremely disappointed" to be ruled out.

Ann Lucas of Coventry City Council said: "We feel certain the authorities will face severe hurdles before the realisation of a national stadium at Wembley."