Chelsea’s staggering spending spree continued when they broke the British transfer record to sign Enzo Fernández for €121m (£106.8m) after a frenzied day of negotiations with Benfica.

The deal, confirmed by the London club early on Wednesday morning, takes Chelsea’s spending under the Todd Boehly-Clearlake Capital ownership to more than £500m and is another sign of their determination to dominate the transfer market.

Negotiations were led by the co-owner Behdad Eghbali, who was dogged throughout discussions with Benfica on Tuesday, and Graham Potter will hope Fernández makes his side stronger in central midfield.

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It is understood that Chelsea, who sold Jorginho to Arsenal for £10m plus £2m in add-ons earlier in the evening, reached an agreement with Benfica about two hours before the window shut at 11pm UK time. Fernández’s contract contained a €120m (£105.9m) release clause and Benfica were adamant it be paid in full. Chelsea failed with a bid for the 22-year-old earlier in the window but had made him their top target in midfield. Talks reopened over the weekend.

Chelsea, who with this deal have bought 16 players since last season ended, were reluctant to trigger the clause because of concerns over breaching financial fair play regulations. Negotiations centred around payment structures that would satisfy FFP rules. Chelsea eventually agreed to pay more than the clause but over several instalments. The deal eclipses the previous British record – Jack Grealish’s £100m move from Aston Villa to Manchester City in 2021. Benfica signed him last year from River Plate, who are have a 25% sell-on clause.

Chelsea continued with their policy of offering long-term deals. Fernández, who helped Argentina win the World Cup in Qatar, has agreed an eight-year deal. The club believe that handing out such deals will help them meet FFP rules. Amortisation is the key – spreading the cost of a fee over the length of a contract. However Uefa is set to change those regulations from the summer, with clubs expected to be stopped from spreading the cost of fees for more than a period of five years.

Chelsea, who are 10th in the Premier League, handed Mykhailo Mudryk an eight-and-a-half-year half deal after signing the Ukraine winger from Shakhtar Donetsk for £88.8m. Potter’s team are out of both cups and face a fight to qualify for the Champions League.

The hierarchy have backed Potter despite a string of disappointing performances. Along with paying huge fees for Mudryk and Fernández, Chelsea paid £8.8m to loan João Félix from Atlético Madrid and bought Andrey Santos, Davide Datro Fofana, Benoît Badiashile and Noni Madueke. Malo Gusto was bought from Lyon and loaned back to the French club.

A plan to loan Hakim Ziyech to Paris Saint-Germain collapsed at the last minute and Potter has been left with a huge squad. Chelsea will be able to register only three signings in their 25-man squad for the Champions League. They meet Borussia Dortmund in the last 16.

Arsenal moved for Jorginho after accepting that Brighton would not sell Moisés Caicedo. The last-ditch nature of the move for Fernández ended any chance of Conor Gallagher leaving Chelsea, who had interest in the midfielder from Newcastle, Crystal Palace and Everton.