QPR have agreed a £42million settlement with the EFL over Financial Fair Play dispute

Credit: PA

QPR have reached a settlement worth almost £42million with the English Football League and accepted a transfer ban in January after a four-year legal battle over the club's breach of spending limits.

Last October, an arbitration panel ruled that QPR's fine of £41.965million for over-spending during the 2013/14 season that saw them promoted to the Premier League was not disproportionate.

The west London club lodged an appeal against the decision and a hearing was scheduled to start earlier this month but, in a joint statement, the two parties have announced they have reached an agreement to effectively restructure the fine.

QPR will now pay the league £17million for the Financial Fair Play breach and £3million for the league's legal costs, and a payment schedule that Press Association Sport understands to be 10 years has been agreed.

The balance of the original fine, £21.965million, will be swallowed by QPR's owners by converting outstanding loans to the club into shares.

Crucially for the club, none of these payments to the EFL will be taken into account when calculating the amounts QPR are allowed to spend on players and wages in the coming seasons but manager Steve McClaren will not be allowed to register any new players in this season's winter transfer window.

EFL chief executive Shaun Harvey said: "The outcome vindicates the approach of the EFL Board in defending the challenge to our Rules.

"In agreeing to the settlement above, the Board was conscious that the financial burden placed on the club had to be manageable, so as not to put its future in doubt when considering that after this season the club will no longer benefit from the promotion that was the catalyst for the dispute in the first place."

That is a reference to the EFL's concerns about bankrupting QPR, particularly as this is the last season they will receive Premier League parachute payments after their relegation in 2015.

Harvey added that QPR "remain a valued member of the EFL and a great community asset" and said the league was "delighted" to end this "long-running dispute".

Earlier this year, Bournemouth and Leicester agreed to pay fines of £4.75million and £3.1million respectively for overspending during their promotion seasons.

QPR's case was always more complicated and contentious, partly because of their expensive relegation and partly because their overspend in the EFL, almost £70million, was more than Bournemouth's and Leicester's combined.

Fernandes is the chairman of QPR. Credit: PA

The QPR case hinged on the belief of their owners, airline tycoon Tony Fernandes and steel magnate Lakshmi Mittal, that they had circumvented the rules by writing off a £60million loan to the club, an "exceptional item" that brought QPR's losses for the season below £10million.

The EFL rejected this, knowing it would set a precedent that would make a mockery of its attempts to control spending and clearly feel Friday's announcement is a compromise that punishes QPR without killing them, preserves the integrity of their rules and draws a line under a time-consuming and at times bitter row.

Or, as QPR chief executive Lee Hoos put it: "Whilst we felt we had a very strong case on appeal, QPR felt it was best to put this matter behind them to enable all parties to have certainty and allow us to continue focusing on running the Club in a sustainable manner, going forward.

"We feel this is in the best interests of football as a whole."