The Premier League's plan to introduce minimum quotas of home-grown players next year has been hailed as a "major breakthrough" by the government.
Andy Burnham, Secretary of State for Culture, Media and Sport, also praised the league for showing "real leadership" after chief executive Richard Scudamore unveiled their proposals at the Premier League headquarters yesterday.
The moves are an effort to safeguard the future of the England team, the subject of which had been among a series of questions tabled by Burnham last October.
A home-grown player is one that has spent three successive seasons at his club between the ages of 15 and 21.
Scudamore revealed that the 20 Premier League clubs had agreed "in principle" to introduce a quota scheme of home-grown players but the proposal, if adopted, would take effect from the start of the 2010/11 season.
"The Premier League announcement on proposals for introducing a home-grown player quota is a major breakthrough for the English game," said Burnham.
"It shows the league is showing real leadership on some of the issues raised by FIFA and UEFA.
"I believe a quota would help the English national team and help cement a sense of local identity between supporters and their club.
"In the long run it could help bring a measure of competitive balance to the game at the top tier.
"The Premier League should be congratulated for taking this step and I believe such a move would help secure the health of the English game for years to come."
The adoption of a quota system is expected to be rubber-stamped at a meeting of the club chairmen next month.
"Reflecting the need to encourage the development of local talent and to be confident that the future supply of England-qualified players is at least as good as now, our clubs have indicated in principle their support for a home-grown player quota to be applied to Premier League matches," revealed Scudamore.
"Measures under active consideration include: restrictions on foreign loans to bring them into line with regulations for domestic loans; the development of youth development financial incentives; constraints on the moves of under-18s; reforming the domestic compensation system and improvements to youth development and coaching."
The league also plans to introduce financial incentives for clubs in order to ensure the flow of youngsters from their academies into the first team.
"If there is a way of incentivising clubs to bring players in at 17, 18, 19 and keep them on as first-team players, we want to do that," added Scudamore.
"If you have a toss-up over a home-grown player, we want the clubs to have an incentive to keep the home-grown player, where at the moment you can have the argument that it's cheaper to bring in a player from outside."
The league has yet to decide which quota model they will adopt. The Football League already uses a quota system based on having four home-grown players in their matchday squad of 16.
But Scudamore made it clear the league has no intention of accepting FIFA president Sepp Blatter's controversial 'six-plus-five' proposal, under which every club's starting line-up would consist of at least six players from that country.
The other alternative would be for something akin to the system used by clubs in the Champions League.
They are required to name a squad of 25 players, including four home-grown players that have emerged from their own youth set-up, even if imported from overseas, and another four who have been trained within a similar framework at other clubs.