Mick Mills, England's captain at the 1982 football World Cup, has been accused of "turning a blind eye" to an initiation ceremony on young footballers known as "the Glove" that has left Stoke City in court facing a landmark case.

Mills, awarded an MBE after a career that included 43 England caps, was Stoke manager in the 1980s when teenage apprentices at the club were allegedly subjected to a punishment ritual also known as "the Finger", whereby a goalkeeper's glove was smeared with heat cream and used in a sexual assault.

The Premier League side are now facing a civil case for damages after a former trainee, George Blackstock, started an action against the club for a breach of duty, claiming he was left with post-traumatic stress because the first-team goalkeeper, Peter Fox, perpetrated the act upon him in the first-team dressing room at the now-demolished Victoria Ground.

Other cases are "in the wings", Preston county court was told, as more alleged victims from Stoke initiate their own claims, alleging separate incidents caused them post-traumatic stress and depression. Blackstock claims that in another incident first-team players held him down and placed a hot teapot against his bare backside.

Blackstock, from Belfast, is also suing Fox. Lawyers working on the case believe it could open the way for a wave of other civil claims because of the practice of initiation ceremonies at other clubs. "If one is taking the lid off Pandora's box, it is not likely to be an isolated event," Nicholas Fewtrell, the barrister representing Stoke, told a hearing at the Preston court. "This practice of punishments, pranks and initiations will have been common at clubs in all sports."

Staffordshire police carried out an inquiry in 2008, with seven more former Stoke apprentices claiming they were abused, but the Crown Prosecution Service ruled there was insufficient evidence.

Mills, now 64, is named in the proceedings as having allegedly known how Stoke's trainees were treated and not taking any action. Tony Lacey, 69, a former Stoke player who worked as the club's youth development officer, is also accused of being aware of what allegedly happened. "The manager knew what was going on and the development officer knew, and they turned a blind eye," Blackstock says in a psychiatric report.

Fox, now a coach at Blackburn Rovers' academy, who made 477 appearances for Stoke during 15 years at the club and was twice their player of the year, denies the allegations. Mills and Lacey also deny Blackstock's claims, the court was told. "These allegations against Mr Mills, a former England captain, are extremely serious in his professional career," Fewtrell said. "To be accused of something like this, though it is not a criminal offence, is very serious for him, 25 years after the event."

Blackstock, now 43, claims the mental issues he suffered affected him so badly it directly led to him being released by the club, then in the old Second Division. He left England to play for Ards and East Belfast. He claims he was dragged along a corridor to the dressing room, then made to lie down while his shorts were pulled down. He alleges three other first-team players were present and that all the other apprentices and first-team players knew what had happened. He also claims he heard someone shout: "Foxy, give him the glove."

Another apprentice, Ian Gibbons, was named in court as saying he had "received the glove about a month after George received it". A statement from Gibbons says: "I remember George had brought tea for some of the players and some complained it was not warm enough. The players held him down and the hot teapot was placed on his backside. Peter Fox went over to George and inserted his glove into his backside. I remember George being hysterical and crying. It was awful to witness."

Blackstock says he did not report either incident because he felt it would jeopardise his chances of getting a professional contract. He now works as a driver and a storeman for a double-glazing company and is suing for "distress, pain, humiliation, injury, loss and damage".

In his written defence, the 56-year-old Fox says: "It is an allegation without any substance whatsoever, made at least 25 years after the alleged events are supposed to have taken place." Fox, who also played for Sheffield Wednesday and Exeter City, describes the claims as a "devastating shock" and denies assaulting "any apprentice … at Stoke City or anywhere else".

It was claimed in court that George Berry was "one of the main bullies". Tony Kelly was also identified, the allegation that they had helped to pin down Blackstock on the physio's table during one of the incidents. Aswini Weereratne, representing Blackstock, said the culture was that the door was locked, the player was "shouting, sometimes screaming" and football's "macho culture … went far too far at this club". Blackstock had allegedly received the glove treatment for "making a poor line call" during a practice match between the first-team and the apprentices. He claims another of the young players had hidden because he was so frightened it would happen to him.

The hearing is determining whether the case can proceed, due to the length of time since the alleged incidents took place. A decision will be made in the new year.