The Professional Football League has ruled that Paris Saint Germain will not be allowed to defend their title in next year's Coupe de la Ligue after a controversial banner was displayed during last month's final.

But the president of the LFP disciplinary commission Jacques Riolacci said that the club would not be deducted points because the racist connotation had not been established.

"The disciplinary commission didn't find that the banner, despite shocking a lot of people, was strictly racist," said Riolacci.

A points deduction would have been disastrous for the club who are currently mired in a desperate battle against relegation from the first division.

However, the 1996 Cup Winners Cup champions have said they will appeal the decision.

"PSG will do everything in its power to contest and try and annul this decision," it said in a statement.

A criminal investigation has been opened aimed at finding those responsible for "inciting hatred and violence" against northerners.

The 25-metre long banner unfurled during the second half of the match targetted inhabitants of the industrial northeast of France, home to Lens, who were contesting the final at the Stade de France, which PSG won 2-1.

'Paedophiles, unemployed, inbreds: Welcome to the home of the Ch'tis [nickname of people from northeast France],' the banner read.

On the orders of President Nicolas Sarkozy, who was attending the match, the banner was quickly removed by security forces but not before the damage was done.

The offending banner was a play on the recent box-office cinema hit 'Bienvenue chez les Ch'tis' ['Welcome to the Land of the Ch'tis'] which painted a rosy picture of northern life.

AFP