The Football Association is set to block a proposal to allow the English Football League’s Welsh clubs from competing in a new Welsh League Cup next season in what would represent a major blow to Wrexham’s European ambitions.

The EFL is understood to have raised objections to a request from the FA of Wales for Wrexham, Cardiff, Swansea and Newport to take part in an expanded League Cup, which they hope will generate £3m a year in additional revenue. Getting bigger clubs into European competition could also improve Wales’s Uefa coefficient.

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Uefa has given its approval and confirmed the winners would be granted a place in the qualifying rounds of the Europa Conference League, with the proviso that EFL-based clubs cannot also qualify via English competitions. The final decision rests with England’s FA, however, which is consulting with the EFL and the Premier League over the matter. The issue will be discussed at a meeting of the FA’s Professional Game Board next week but sources involved say they are minded to reject the proposal.

The PGB is made up of four representatives from the Premier League and the EFL, with both organisations having serious reservations about the FAW’s plan. After next week’s discussions, the PGB’s recommendation will be taken to the full FA board for ratification.

The main objections raised during preliminary discussions are understood to centre on the potential knock-on effect for the integrity of EFL competitions, greater fixture congestion and the prospect of Welsh sides gaining a significant commercial advantage. The EFL’s biggest concern is believed to be a fear that opting out of European qualification via English competitions, which Swansea achieved by winning the League Cup in 2013, could affect their value.

The possibility of Wrexham in particular gaining a further commercial advantage by qualifying for the Conference League via winning the Welsh League Cup has also been raised by several clubs, some of whom are openly resentful at the manner in which their Hollywood owners, Ryan Reynolds and Rob McElhenney, have successfully tapped in to the American market. Having Wrexham in the Conference League would benefit Uefa given the size of their fanbase in the United States.

Ironically, a very different Wrexham were the last Welsh English league club to qualify for Europe through a domestic pathway when they competed in the 1995-96 Cup Winners’ Cup after winning the Welsh Cup the previous season.

“The Welsh clubs either play in English competitions or they don’t,” one source said. “The ‘Welcome to Wrexham’ effect has been great for the EFL, but the EFL has also been great for Wrexham.

“It seems fundamentally unfair for these clubs to get both the commercial advantages of playing in England and then the further benefit of qualifying for Europe via a Welsh competition.”

The EFL is understood to have spent the last few days lobbying the FA after the FAW went public with the Welsh League Cup plan on Monday.

In an attempt to allay some of these concerns, the FAW said earlier this week that the four concerned clubs have “agreed to exclude any profit derived from representing Wales in Uefa competitions for financial regulations in the English Football League or the English Premier League”. While this would remove the issue of Welsh clubs gaining an advantage in terms of profit and sustainability rules, the broader financial benefits from playing in Europe would remain.

The issue is a delicate one for the FA as it is working closely with the FAW on the 2028 European Championship, while the dispute also has a political dimension as the Welsh government is backing the plan.

The FA and the EFL declined to comment.