The government has issued a stark final warning to football, making it clear that it is already drawing up legislation in an effort to force the game into long overdue reforms, including becoming more diverse and involving fans in the running of clubs.

In a letter to the culture, media and sport select committee, which published its initial report on the game's governance failings in July 2011 and then in January this year made clear its displeasure at football's inadequate response, the sports minister, Hugh Robertson, reveals he has obtained permission from the Parliamentary Counsel to draw up the draft bill.

While successive sports ministers have attempted to threaten and cajole the Football Association and the game at large into action, Robertson is the first to begin working up a draft bill. The outgoing FA chairman, David Bernstein, forced to step down in July on account of his age, has recently expressed his own intense frustration at the slow pace of change.

"I share the select committee's frustration at the football authorities' slow progress in implementing long promised and much needed reforms," Robertson writes. There are, he says, "three key areas" where progress needs to be made urgently: a licensing system for clubs; "the introduction of a representative and balanced board" at the FA; and "improved supporter engagement at club level". Without "significant progress" by the start of next season, Robertson warned: "We should seek to introduce legislation as soon as practicably possible."

The select committee, withering in its assessment of football's response to the original report, believed the game was too much in thrall to the influence of the Premier League. "Altogether ... they fail to address the fundamental issue that the FA should exercise responsibility for all issues of major significance to the game through its main board and council," it said.

It also called for an overhaul of the FA Council, which is supposed to be the game's parliament but is frequently criticised for a lack of diversity, and concrete proposals for greater fan influence at every club. The FA Council has 118 members, many of whom have served for more than 20 years while two-thirds are aged 64 or over.

While the Premier League and the Football League have made progress in introducing more effective financial controls and greater transparency, the government wants to see an over-arching licensing system with the FA as the backstop regulator.

Whitehall sources stress that the legislation would not seek to exert government control over football but would seek to enable the transformation of the FA into a modern governing body. They point to the analogy of the BBC Trust, which replaced the outmoded BBC board of governors in the wake of the governance debate that followed the Hutton inquiry.

Ironically, Greg Dyke – the former BBC director general forced out in the wake of the Hutton report – takes over as chairman of the FA in July. Robertson is expected to meet with him before he starts in an attempt to obtain assurances that he plans to follow a reforming agenda.

Bernstein attempted to take a collegiate approach to reform and made some progress, securing the addition of two independent directors to the main board but hit the buffers when he attempted to put further changes before the FA Council.

Robertson also urged the football authorities to provide more detail on how they planned to engage with supporters' groups and called for the process to be enshrined in any licensing system. He also reiterated the committee's call for a long-term financial settlement for Supporters Direct, the organisation that supports and co-ordinates the efforts of supporters' trusts.

"At the same time, I believe the football authorities should continue to consider ways to actively encourage and incentivise the inclusion of supporter representatives on the boards of clubs," Robertson said.