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Cardiff City are set to launch legal action against Crystal Palace and Iain Moody in the wake of the ‘spygate’ scandal, we can reveal.

Bluebirds chiefs today sent legal letters to the Premier League club and their sporting director, informing them they intend to pursue a claim for financial damages following the furore.

Palace were found guilty of breaching Premier League rules earlier this week following a four-month investigation sparked by the Bluebirds’ furious complaint in April.

Cardiff accused their rivals of obtaining Ole Gunnar Solskjaer’s starting XI before the crunch clash on April 5, a match the Bluebirds lost 3-0 as their season imploded before ending in relegation.

The initial complaint centred around Palace sporting director Moody, who was dismissed by Cardiff owner Vincent Tan before taking up a post at Selhurst Park in November.

It was reported Cardiff believed Moody had used his contacts around his former club to find out which players would start for Solskjaer at Cardiff City Stadium.

Moody rejected the claims as “incredibly, extraordinarily untrue”, but the Premier League ruled Palace had, in fact, broken rule B16 of the Premier League handbook, which states clubs must behave towards each other “with the utmost good faith”.

In pictures: Cardiff's 3-0 defeat to Crystal Palace in April

Despite the Premier League side facing a fine of up to £25,000 following the guilty verdict, Cardiff chiefs are believed to be angry they have not received an apology and are determined not to let the matter rest.

The letters sent to Moody and his employers do not contain specific details of the claim at this stage, but it is understood the loss of earnings caused by relegation will probably form part of the action.

On average, clubs who drop out of the top-flight incur a loss of around £20m, including a massive loss in TV revenues.

At the time of the fixture at the centre of the storm, Cardiff were one point adrift of 17th spot. They went on to finish bottom of the table, while Palace, under the guidance of Tony Pulis, finished 11th following an incredible run of form.

In a separate twist to the dispute between the two clubs, former Cardiff boss Malky Mackay, who was also sacked by the Bluebirds following a bitter bust-up with Tan last season, is favourite to replace Pulis as Eagles boss this week.

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