Manchester City are facing UEFA sanctions for breaching financial fair play rules which would see the club limited to a 21-man Champions League squad instead of the usual 25 players next season, the Press Association reports.
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City, who are still strongly challenging the settlement offer from UEFA, are also facing a fine in the region of 60 million euros (around 50 million pounds, $83.5 million) over three years, and a cap imposed for next season to ensure there is no rise on this season's Champions League A squad wage bill.
The reduction in the size of the Champions League squad to 21 would potentially hit the club hardest, and City would also have to ensure that there are still eight locally-trained players in that A squad.
Press Association Sport reports that the sanctions are very similar to those being handed to Paris Saint-Germain -- the two clubs are among nine European sides being dealt with by UEFA's club financial control board (CFCB) for FFP breaches.
City have until the end of the week to reach an agreement with UEFA over the sanctions, but PA Sport claims they are the club furthest away from reaching any final settlement. If no agreement is reached City face the prospect of the case being handed to a panel for a non-negotiable decision.
Neither City nor UEFA would comment but, according to PA Sport, the Manchester club have been negotiating forcefully for a significant reduction in that sanction but have been struggling to make progress.
The risk, however, is that if they are unable to agree a deal with UEFA then they could face even stiffer sanctions from the CFCB's adjudicatory panel.
City manager Manuel Pellegrini shrugged off talk about the possible sanctions and said he will address the issue when UEFA publicly announce what the club's punishment is.
"I don't know if it is official news of UEFA of just rumours," he said in a news conference. "If it is not official, I don't have anything to say. "When it is official news of UEFA we can analyse what happens with the team. In this moment we don't know what happens."
No club is expected to be excluded from the Champions League for breaching the spending limits, the maximum possible sanction -- although UEFA president Michel Platini said last month he does not envisage that to happen.
Both Manchester City and Paris Saint-Germain are believed to have fallen foul of the FFP rules with sponsorship deals related to each clubs' owners.
Abu Dhabi-owned City have a 40 million pounds-a-year deal with Etihad airways, while Qatar-owned PSG have a back-dated deal with the Qatar Tourist Authority (QTA) which is worth up to 200 million euros (165 million poinds) a year.
French newspaper L'Equipe has reported that UEFA has ruled the QTA deal should only be valued at half that sum, and that the French champions will be hit with a four-pronged punishment for their own breaches of the rules.