What exactly did Manchester City do wrong?

European football's governing body say City have made 'serious breaches' of their club licensing and Financial Fair Play regulations which they committed by 'overstating its sponsorship revenue in its accounts and in the break-even information submitted to UEFA between 2012 and 2016'.

UEFA also said City failed to co-operate with an investigation into the matter launched by its Club Financial Control Body.

Uefa launched a probe after documents obtained by a hacker and published in German media suggested the club had falsely inflated sponsorship deals with firms with firms linked to their Abu Dhabi ownership in an alleged attempt to circumvent Uefa's FFP rules.

Are they going to appeal?

City have reacted furiously to the development and say they will appeal to the Court of Arbitration for Sport (CAS).

A searing statement released by the club said: 'Manchester City is disappointed but not surprised by today's announcement by the UEFA Adjudicatory Chamber.

'The club has always anticipated the ultimate need to seek out an independent body and process to impartially consider the comprehensive body of irrefutable evidence in support of its position.'

What happens with City in the Champions League this season?

Guardiola's side will continue their Champions League campaign this season as normal.

The ban, which is being appealed, excludes City from Europe's elite competition for the next two seasons (ie. the 2020/21 and 2021/22 seasons).

City face Real Madrid at the Santiago Bernabeu in the first leg of their Champions last-16 tie on February 26.

What are their chances of success with the appeal?

AC Milan were banned from European competitions for breaching FFP rules by UEFA in 2018 for two years just like City have been now.

The Serie A club took appealed to CAS and it was appealed which allowed Milan to enter the Europa League in the 2018-19 season.

But last summer Milan were referred to UEFA's financial watchdog again and served a one-year ban from European football during the current campaign.

It will not be a surprise if something similar happens with City.

What does it mean for top four/five contenders?

One major question on the lips of many Premier League clubs is who will take City's Champions League spot if the Citizens finish in the top-four.

While UEFA and the Premier League have not confirmed what will happen regarding England's qualification spots, UEFA rule 4.08 says:

'A club which is not admitted to the competition is replaced by the next best-placed club in the top domestic championship of the same association, provided the new club fulfils the admission criteria.one potential solution is that fifth place qualifying for European's biggest club competition.'

This would mean Chris Wilder's Sheffield United - who currently occupy that fifth position in the Premier League - are in pole position to qualify for the Champions League with just over a dozen matches remaining.

What does it mean for Pep's future at the club?

Guardiola has a break clause in his contract which could see him leave City at the end of this season.

Sportsmail can reveal that the deal the Spaniard signed last year — which saw him extend his original contract until 2021 — included an agreement that he could depart at the conclusion of this campaign should certain stipulations that satisfy the club be met.

City officials are confident that, despite an underwhelming season to date which has seen City fall a hefty 22 points behind runaway leaders Liverpool, Guardiola will honour his deal.

By Jack Kinnersley