• City describe New York Times report as ‘extremely concerning’ • Club say they have ‘comprehensive proof’ of their innocence

Manchester City say they have provided “comprehensive proof” of their innocence to the Uefa body investigating allegations of financial fair play (FFP) irregularities, which could be on the verge of recommending a Champions League ban for the club.

Members of Uefa’s club financial control body (CFCB) investigatory chamber (IC) are thought to have expressed a strong view that City should be referred to the adjudicatory chamber (AC) for a final judgment, and to have recommended a Champions League ban if the allegations of misleading Uefa over FFP are proved.

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The IC chairman and chief investigator, Yves Leterme, a senior Belgian politician and former prime minister, is considering whether he agrees with that view, and will refer the club to the AC, which applies sanctions.

IC members are thought to have formed the view, following a formal investigation launched in March, that if the AC concludes that City have misstated their income to Uefa, as alleged, the offence is so serious as to warrant a Champions League ban. Any such sanction would have to be imposed by the AC, because the IC’s disciplinary powers are limited to a warning, a reprimand or a fine up to a maximum of €100,000 (£87,000).

City, who have strongly denied any wrongdoing, can be expected to oppose fiercely even the referral of the case by the IC and to appeal against any sanction all the way to the court of arbitration for sport if they consider it necessary, arguing they have proven the allegations are false.

The club, whose team claimed a successive Premier League title on Sunday and can win an unprecedented domestic treble if they beat Watford in the FA Cup final on Saturday, are concerned that the suggestion of a guilty finding and Champions League ban is already damaging and could deter players from signing.

City have been facing allegations since November that they falsely declared as sponsorships millions of pounds that were in fact an investment from the club’s owner, Sheikh Mansour bin Zayed al-Nahyan, of Abu Dhabi’s ruling family. The allegations are based on “leaked” internal City emails and other documents published by the German magazine Der Spiegel.

The principal allegation is that in 2012-13 and 2013-14 City overstated to Uefa – and initially to the Premier League, which operates FFP declarations for its clubs – the amounts paid by their principal sponsor, the Abu Dhabi state airline, Etihad. An email from Simon Pearce, a senior City director and Abu Dhabi executive, to Jorge Chumillas, then the club’s chief financial officer, appears to suggest that Mansour’s own holding company, ADUG, paid the bulk of the then £65m annual Etihad sponsorship, while the airline paid only £8m. In another email Chumillas appears to have asked if ADUG paid sponsorship money to Etihad, which then paid it to City.Uefa’s FFP rules limit investment by owners to encourage them not to bankroll losses made by overspending on players. City have been sponsored by Etihad and other Abu Dhabi sponsors since shortly after Mansour bought the club in 2008.

City have declared in their accounts investment totalling £1.3bn from Mansour, much of it on players and their wages, which the club could not otherwise afford in the early years of fuelling City’s rise, but all commercial income is stated as separate from Mansour.

Etihad denied the allegation in November, stating that: “The airline’s financial obligations, associated with the partnership of the club and the broader City football group, have always been, and remain, the sole liability and responsibility of Etihad Airways.”

City initially refused to engage at all with the coverage, stating that the documents were “purportedly hacked or stolen” and the contents taken out of context. After huge media coverage and pressure from other major European clubs, the CFCB’s investigatory chamber initially told Uefa it was not set up to investigate alleged misrepresentations by clubs, but Uefa encouraged it to do so, and the formal investigation was launched.

City then explicitly denied wrongdoing for the first time, stating that the club welcomed the investigation “as an opportunity to bring to an end the speculation resulting from the illegal hacking and out of context publication of City emails.”

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Responding to a report in the New York Times on Monday that the IC is set to recommend City being banned from the Champions League, the club issued a strongly worded statement saying they have provided proof that the allegations are false.

This would be presumed to include further internal financial evidence and an explanation of the emails. The statement protested that the IC process itself has been the subject of leaks. “Manchester City FC is fully cooperating in good faith with the CFCB IC’s ongoing investigation,” the statement said.

“In doing so the club is reliant on both the CFCB IC’s independence and commitment to due process; and on Uefa’s commitment of the 7th of March that it … will make no further comment on the matter while the investigation is ongoing.

“The New York Times report citing ‘people familiar with the case’ is therefore extremely concerning. The implications are that either Manchester City’s good faith in the CFCB IC is misplaced or the CFCB IC process is being misrepresented by individuals intent on damaging the club’s reputation and its commercial interests. Or both.

“Manchester City’s published accounts are full and complete and a matter of legal and regulatory record. The accusation of financial irregularities are entirely false, and comprehensive proof of this fact has been provided to the CFCB IC.”

A statement from Uefa said: “We do not comment on ongoing investigations regarding financial fair play matters.”