Blues will end up just two points above the bottom three despite currently having a 14-point cushion

Birmingham City face the prospect of being thrown into a Championship relegation battle with the club set to be docked 12 points for breaching Financial Fair Play regulations.

The EFL expect the most severe punishment since Leeds United were deducted 15 points in 2007 as they believe Birmingham made ‘serious breaches’ of FFP, the Daily Mail report.

Birmingham are facing the biggest EFL points deduction in over a decade

The hearing was due to begin on Monday, with lawyers representing both the club and the EFL appearing before a disciplinary panel.

The panel will deliver the verdict with the EFL pushing for a 12-point deduction.

Such a sanction will place Birmingham’s Championship status under threat, with Blues set to lose the cushion they have over the relegation places.

Garry Monk’s side currently sit comfortably mid-table with 14 points between them and Rotherham in the final relegation place, but a 12-point deduction will leave Blues only two points ahead of the bottom three heading into the final stretch of the season.

Birmingham’s excessive overspending was detailed in the club’s annual accounts, which were published in January.

The St Andrew’s outfit saw massive wage increases during Gianfranco Zola and Harry Redknapp’s managerial reigns, with Blues remarkably spending £202 for every £100 brought in.

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Birmingham were handed a transfer ban last season for exceeding permitted losses in a three-year period, but they signed Kristian Pedersen, the full-back, regardless.

The EFL refused to register Pedersen initially, but after reviewing the such a move from a legal standpoint, the 24-year-old was finally awarded clearance to play two days before the start of the season.

The EFL expressed their disappointment at Birmingham ignoring the transfer embargo to sign Pedersen, who has gone on to play 30 times this season.