Birmingham City are facing the prospect of being hit with a huge 12-point deduction for breaking rules on spending, in a landmark case for the English Football League.

Garry Monk’s Championship club could be struck with the unprecedented punishment this season after the EFL agreed on the proposed sanctions this week.

Birmingham are understood to be in deep trouble for breaching profitability and sustainability rules, with the EFL determined to adopt a tough stance by pushing for a deduction of up to 12 points and a heavy fine.

Rival Championship clubs have also complained over Birmingham’s £2m signing of Danish left-back Kristian Pedersen while under a transfer embargo.

Pedersen was signed from Union Berlin in June despite the club operating under a “soft” embargo, leading to the EFL later admitting in a statement that they were “exceptionally disappointed”.