Manchester City can keep spending this summer after the Premier League champions were cleared of breaching transfer rules around the signing of an Argentine teenager.

City were at risk of a two-window transfer embargo after being accused by Velez Sarsfield, the Argentine club, of flouting regulations in the signing of attacking midfielder Benjamin Garre in 2016.

But the Court of Arbitration for Sport (CAS) announced on Tuesday Velez’s claim had been dismissed more than nine months after the landmark court case was heard, clearing the way for Pep Guardiola to further strengthen his squad.

The City manager wants to sign a ball-playing defensive midfielder, with Borussia Dortmund’s Julian Weigl, Fred of Shakhtar Donetsk, and Napoli’s Jorginho among the targets, and a versatile forward. Lemar, of Monaco, and Leicester’s Riyad Mahrez are options. Guardiola could also target a centre-half.

Velez have a technical right to appeal, although it was unclear last night if they would go down that route. CAS will publish their full findings on the case on Friday.