The proposal would require clubs to reduce their losses next season to £12m a year, and by 2017 reduce the permitted loss to £5m a year. Of that, £3m would have to be covered by a capital injection from an owner or investor, leaving £2m as the loss clubs are allowed to make.

Some clubs, including representatives of Brighton & Hove Albion and Crystal Palace, argued the proposal does not go far enough. The financial position of Championship clubs is particularly difficult; those relegated from the Premier League struggle with the huge drop in income yet are still able to pay their players a great deal more than their competitor clubs because they receive parachute payments, now £16m a season for two seasons, then £8m for two seasons after that. The other Championship clubs, playing for survival or chasing promotion to the Premier League, tend to overspend seriously on players' wages.

In 2009-10, 21 of the 24 made a loss, six of them more than £10m. Bristol City lost £12m and on Tuesday announced losses for 2010-11 of £11m. Last year Ipswich lost £15m, Nottingham Forest £12m and Sheffield United, now in League One, £19m.

Greg Clarke, the Football League chairman, has repeatedly warned the clubs, and did again in the meeting at Coventry, that they face a dire general economic outlook and a prolonged recession for which they must be prepared. The League will now draw up detailed proposed rules, to include the financial provisions by which the £5m loss will be permitted from 2017.

A League spokesman said of the meeting: "Owners and executives of Championship clubs reaffirmed their commitment to the principles of financial fair play as a means for encouraging financial sustainability at club level. After further discussions about the practical implementation of financial fair play, clubs agreed that the proposals should be finalised and taken forward to the next meeting of Championship clubs at Derby in February for final ratification."

Some who believe the rules propose allowing clubs to make losses which remain excessive think they will at least set a framework for limiting losses, which can be strengthened in the future.

Barry Kilby, the chairman and major shareholder of Burnley, said: "As they stand, I believe the proposals are too lax, in the amount clubs are still allowed to lose and the expenses they can set against the assessment of that figure. But it is important, good for the game, for us to establish the principle of financial controls."{jcomments on}