Uefa's chief investigator confirms Manchester City could face Champions League ban

Uefa's chief financial investigator has confirmed Manchester City could face a Champions League ban over the alleged £60million payments deception revealed during the Football Leaks scandal.

Telegraph Sport first disclosed last month how European football's governing body was considering a suspension against the Premier League champions over potential breaches in Financial Fair Play rules. Yves Leterme, the chairman and chief investigator of Uefa’s Club Financial Control Body, has now gone on record to confirm that the club face "the heaviest punishment" if the allegations are proven.

Senior Uefa officials - who previously launched sanctions against City in 2014 - are particularly enraged by leaked files from 2015, which claim almost £60million was paid directly into the club by their billionaire Arab owners but declared as sponsorship.

"If it is true what has been written, there might be a serious problem," he says in an interview translated by German magazine Der Spiegel, which initially broke the Football Leaks scandal. "This can lead to the heaviest punishment: exclusion from the Uefa competitions."

The revelation is particularly bad timing for City, coming just hours before the club take on Liverpool in their most important domestic match so far this season.

The documents, allegedly obtained by illegal email hacks, were previously said to show £59.5million that was supposed to have come from City's principal sponsor, Etihad Airways, was paid directly to the club by the Abu Dhabi United Group. To put that into context, City's record signing is Riyad Mahrez, who cost £60million from Leicester City last season.

At a Uefa conference in Dublin last month, Aleksander Ceferin, the Uefa president, said: "We are assessing the situation. We have an independent body working on it. Even if I knew more, I couldn't tell you now, but very soon you will have the answers [as to] what will happen in this concrete case."

According to a report in German magazine Der Spiegel in November, City breached FFP rules by €188million (£167million) in 2014.

City owner Sheikh Mansour was accused of funding significant parts of so-called deals with club sponsors in an attempt to escape Uefa sanctions. Der Spiegel also alleged that City set up a secret scheme called "Project Longbow", which effectively hid about £40million in payments to players, after the club had agreed a €20million fine as a settlement for FFP breaches.

However, City have claimed "the attempt to damage the club's reputation is organised and clear" and said they "will not be providing any comment on out-of-context materials purportedly hacked or stolen from City Football Group and Man City personnel and associated people".

Among other potential breaches of Uefa rules, Der Spiegel published emails from 2010, reportedly from board member Simon Pearce communicating with colleagues, in which he discusses a £15million deal with partner Aabar.

"As we discussed, the annual direct obligation for Aabar is £3million," he allegedly wrote. "The remaining £12million will come from alternative sources provided by His Highness [Sheikh Mansour]." In another message, City's chief financial officer, Jorge Chumillas, allegedly wrote that the club faced a £9.9million shortfall to comply with FFP thanks to the contract termination of manager Roberto Mancini. The Italian was sacked in 2013, a year to the day after winning the Premier League title. His giant payoff meant yet more expenditure on City's books that had to be covered by income under Uefa rules.

City were also accused of manipulating other sponsorship deals by backdating them. Der Spiegel reported that City and Paris St Germain breached FFP rules by €188 million and €215million respectively in 2014.

Javier Tebas, chief executive of Spanish football's top division and a long-standing critic of City, has previously expressed doubts over whether City or Paris St-Germain would face sanctions because of a tangled web of financial relationships between the clubs and Uefa.

Tebas has expressed fears that the governing body's links with broadcaster beIN Sports, which has committed billions of pounds to televise Champions League matches and other competitions, present an obstacle to Uefa acting. BeIN is owned by the sovereign wealth fund of the Qatari royal family, which also owns PSG. City are owned by the ruling family of Abu Dhabi in the United Arab Emirates.

Financial Fair Play sanctions were first applied in September 2012, ranging from withholding of prize money to fines and bans from European competition. Queens Park Rangers were fined £17 million in July for breaking spending limits on their way to promotion to the Premier League in 2014. Turkish clubs Besiktas, Galatasaray and Bursaspor have all received bans from European competition for FFP breaches, but AC Milan avoided suspension after a successful appeal.

City were not immediately available for comment on the latest developments.