The Football Governance Bill will establish a new Independent Football Regulator (IFR) as a standalone body, independent of both government and the football authorities.

The body will be equipped with powers revolving around three core objectives: to improve financial sustainability of clubs, ensure financial resilience across the leagues, and to safeguard the heritage of English football.

Under the bill, new owners and directors will face stronger tests to stop clubs falling into the wrong hands, and face the possibility of being removed and struck off from owning football clubs if they are found to be unsuitable.

The bill also includes new backstop powers around financial distributions between the Premier League, the English Football League (EFL) and National League. These powers mean that if the leagues fail to agree on a new deal on financial distributions, then the backstop can be triggered to ensure a settlement is reached.

Prime minister Rishi Sunak said: “Football has long been one of our greatest sources of national pride. Up and down the country, it brings people together in celebration or commiseration.

“But for too long some clubs have been abused by unscrupulous owners who get away with financial mismanagement, which at worst can lead to complete collapse — as we saw in the upsetting cases of Bury and Macclesfield Town.

“This bill is a historic moment for football fans — it will make sure their voices are front and centre, prevent a breakaway league, protect the financial sustainability of clubs, and protect the heritage of our clubs big and small.”

Sports minister Stuart Andrew said: “Football clubs are vital community assets and for far too long some fans have been taken for granted, and clubs lost to unscrupulous owners.

“Today’s bill will pave the way for the creation of an Independent Football Regulator, ushering in greater protections to help clubs and their fans thrive over the long term.”