London: The British government on Wednesday recommended wide-ranging reforms of English football, calling for a new licensing system to monitor debt levels at clubs across the country.
A formal government response to a parliamentary report on football governance called for the Football Association to be given a greater role in managing the sport and ensuring clubs were maintaining sustainable business models.
"The Government shares the concern expressed by the committee at the extent of losses and the number of clubs on the edge of viability," the response said.
"Debt per se is not always a bad thing, but it must be genuinely sustainable and should be assessed as a percentage of turnover.
"Government believes that there is a legitimate role for the national governing body, working hand in hand with competition organisers, to ensure that appropriate and consistent checks and balances are in place to protect the overall financial integrity of the national game and its long-term viability."
The response praised efforts by the Football League to introduce its own financial fair play regulations from next year.
As of the 2012-13 season, clubs will only be allowed to spend what they earn while no more than 55 percent of turnover can be spent on player wages.
"The recent moves by the Football League to work towards a break-even rule in the Championship are a welcome indication of the appetite amongst many clubs for a change," the government response said.
The government said a new licensing system should be set up which would include tests for financial sustainability as well as stringent checks on club owners and directors.
"The Government expects that the issue of financial sustainability should be addressed as part of the recommendations on the new licensing model," the response said.
British Sports Minister Hugh Robertson denied the government was attempting to run football in the country.
"This country is hugely passionate about our national game and there are many reasons we should be pleased with how it has progressed over the last two decades," Robertson said.
"However, I believe that there are improvements that can be made in the governance arrangements, which have failed to keep up with the changing pace of the modern game.
"I do not want Government to run football, so this is an opportunity for the football family to work together to benefit the game in the long term."
A joint statement from the FA, Premier League and Football League said they would take time to consider their response to the government's findings.
"The football authorities are grateful to both the Culture, Media and Sport Select Committee and the Department for Culture, Media and Sport for the time taken and interest shown in the governance arrangements for football," the statement said.
"We shall now take time to consider the Department's response as we formulate what the most appropriate actions might be."