Premier League champions Manchester City could be banned from the Champions League for a year if found guilty of financial irregularities by European governing body UEFA.
UEFA opened an investigation on the allegations at the club earlier this year but City maintain the accusations are false.
According to Sky Sports sources, a UEFA panel is expected to recommend the club receive a one-year ban from the Champions League.
Reacting to the reports which initially emerged in the New York Times, the club have released a statement saying: "Manchester City FC is fully co-operating in good faith with the CFCB IC's (club financial control body investigatory chamber) ongoing investigation."
"The accusation of financial irregularities are entirely false, and comprehensive proof of this fact has been provided to the CFCB IC." it added.
A short statement on the matter by UEFA said: "We do not comment on ongoing investigations regarding financial fair play matters."
City, who defended their Premier League title on Sunday, were knocked out at the quarter-final stage of their year's competition by Tottenham.