The Premier League are considering offering millions of pounds to clubs for fielding British under-21s after a 2011-12 season in which only 43 home-grown players of that age group made first-team appearances.

The League's director of youth development, Ged Roddy, has admitted that the vast amount of money available to clubs in the elite league creates the risk of the competition going the way of tennis and Wimbledon, with "the best competition on the doorstep and hardly any British players in it". A debate is already under way about funnelling TV rights money into a central pot to provide incentives for the use of young British players. Privately, the Premier League accept the sum will need to be substantial to make a difference.

The League recruited John Murtough from Everton as their new head of elite performance last Friday and are employing professional talent-spotters – David Pleat, Brian Little and Joe Royle – at games in the newly constituted under-21s league as part of their effort to prevent the national side suffering from the League's presence. Roddy also believes there may be potential for the Football Association to send money back to the Premier League clubs who have delivered players for Roy Hodgson.

Fewer than half of the 77 under-21s who appeared in the Premier League last season were British, and Hodgson has argued that the new £1 billion Premier League TV rights deal will make it even harder for English players to command first-team places, to the detriment of his national side. This season's relaunch of the old reserves league as an under-21 competition is part of the same drive to develop more young English players.

The under-21 league gives clubs' academy directors the opportunity to meet "technical match observers" to discuss their players' performances. Some games are held in clubs' main stadiums in an attempt to replicate the more challenging atmosphere that players will encounter at first-team level. A knockout phase after Christmas will also increase its intensity.

But Manchester City's football administrator, Brian Marwood, who watched his under-21s draw 1-1 with Wolves on Tuesday night, said he was yet to be convinced that the new league could produce first-team players. "It will be interesting to see if under-21s gets everyone to where they want to be," he said. "One of my worries is: does it have the intensity? The loan system works well if you get it right and that has a better way of developing players. It's not a bad first 45 minutes we've seen out there but I'm not sure we can take a boy [from the under-21s league] and play him against Chelsea [in the first team]."

A recent presentation for Premier League managers at Gloucester Place compared footballers with violinists and stars of ballet in terms of how much coaching time is required to produce first-team players. The managers were told that students from the Yehudi Menuhin School undertook 10,840 hours, the Royal Ballet School and British Cycling 10,000 hours and football 3,760.

Under the Premier League's Elite Player Performance Plan (EPPP), Category One ranked clubs will provide 6,000 hours, excluding game time, though Roddy acknowledges that a high quality of coaching – which Britain has sorely lacked – is more significant.

Marwood said his club – who are investing £200m in a new Etihad Campus in time for the 2014-15 season – are two or three years away from being able to provide an under-21 supply line to the first-team manager, and that City would bring in young overseas players if they had to.

"Our plan is to produce players that will get into the Manchester City team, and from a selfish point of view that may be to the detriment of the English national team," he said.