At a hearing in the High Court today, Mr. Justice David Richards dismissed the latest attempt by HM Revenue and Customs (HMRC) to have the so-called 'Football Creditors' rule declared unlawful.

This decision follows a five-day trial in November and December 2011. HMRC have been ordered to pay the costs incurred by The Football League in defending these proceedings.

HMRC have been granted permission to appeal to the Court of Appeal.

A Football League spokesman said: "The judgment confirms that The Football League's rules and insolvency policy do not breach the principles of existing insolvency law.

"We recognise that some regard the application of these rules as being imperfect. However, they remain an essential part of football's approach to handling insolvent clubs within the wider context of competitive league football.

"The judgment recognises that a league has the right to insist upon insolvent clubs meeting their financial obligations to the rest of the game as a condition of continued membership.

"Had this principle been ruled unlawful, the most likely consequence would be insolvent clubs being expelled from The Football League altogether, as clubs would be unwilling to compete against teams that have defaulted on debts to their fellow clubs. This would have devastating consequences for the clubs concerned, their supporters and people living in their local community.

"Although it is regrettable that HMRC sought to test this matter before the Courts, we remain committed to a constructive dialogue with the tax authorities, as we share the common aim of ensuring that clubs meet their liabilities as and when they fall due, including sums owed to HMRC. To this end, The Football League and HMRC have co-operated over the implementation of a monthly PAYE reporting mechanism that has significantly reduced the amount of tax owed by clubs.

"In an ideal world The Football League would never have to apply its insolvency policy at all. Therefore, our focus will remain on creating a sustainable business environment for all our member clubs. Most recently, this has seen all three divisions of The Football League agreeing to implement cost control measures as part of The League's Financial Fair Play framework."