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UEFA chief Michel Platini has told the European Parliament that unless his plan of capping transfer and wage spending was introduced, Europe's most popular and lucrative sport could "financially implode".

The UEFA president's comments will further widen an already major split with Europe's leading clubs over the issue.

Earlier this month, the European Club Association which represents 137 leading teams such as Manchester United and Real Madrid, said it did not support salary caps.

The Premier League also said it opposed any Europe-wide financial regulation.

But the head of European football's governing body said if action were not taken the game in Europe was "in danger" from the worst financial crisis in nearly 80 years.

"European clubs are currently telling us that our system is in danger of financially imploding in the medium term..." Platini said at the European Parliament in Brussels.

"We are currently looking at the idea of limiting, to a certain degree, a club's expenditure on staff - salary and transfer fees combined - to an as yet undecided percentage of its direct and indirect sporting revenue."

"There are different groups within the ECA and many support the idea. I hope to work out a deal with the clubs as soon as possible," he said.

Platini told lawmakers that under his proposals clubs "would not be allowed to spend any more than 50 to 60 per cent of revenues" on wages and buying players.

But revenue would be classed as money received only from ticket sales, sponsorship, merchandise and television income. It would not include any financial investment by owners or major shareholders.

"For the past 15 or 20 years, we have grown tired of hearing that there is no need to regulate, that the market regulates itself perfectly, that excesses and imbalances will disappear of their own accord," Platini said.

"We now know that none of this is true. In football, as in the economy in general, the market is incapable of correcting its own excesses, and it was not the UEFA president who said so, it was Barack Obama."

Platini said sports in the United States "have coped with the financial crisis better" and Europe could learn lessons from US sports regulators.

"Our American friends have known for decades that sports competitions are only attractive if they are well balanced and if no one team possesses the ultimate weapon," he said.

"The American sports system can certainly give us food for thought. It is completely different from the European model of sport in a number of fundamental ways. There are nevertheless some lessons that we can learn," Platini added.

Platini's move was prompted by a jump in the cost of buying players - highlighted by Manchester City's 110 million euro (£97m) bid for Milan's Kaka - combined with huge salaries as the global financial crisis bites.

"Is it morally acceptable to offer such sums of money for a single player?" Platini said.

World football's governing body FIFA, UEFA and the European Union have also expressed concern over the influx of money from billionaire owners outside Europe who have recently taken large stakes in clubs, particularly in England.

In November, EU sports ministers mulled the possibility of a pan-European financial regulator for sport but decided instead to press FIFA and UEFA to introduce stricter financial rules for clubs and leagues.

Platini told the assembly he did not favour regulation by EU governments and asked Brussels to refrain from imposing its strict competition laws which could prevent him from implementing his new proposals.

"Whatever happens, please do not stop us, on the basis of inappropriate legislation, from establishing financial fair play," Platini said.

Any new UEFA rules would only immediately affect clubs participating in its competitions such as the lucrative Champions League and the UEFA Cup.

But in reality since most clubs either already regularly play in European competitions, or strive to play in Europe, they would be forced to meet UEFA's requirements at all levels.

Reuters