A £50m Premier League rescue package for lower-league clubs has been approved by the English Football League (EFL) after progress was made on discussions between the top-tier league and second-tier Championship.

The financial support package, designed to cover matchday losses for 2019-20 and 2020-21, is set to soon become available for League One and League Two clubs.

The package, which is made up of £20m in grants and £30m in loans to help clubs cope with the absence of matchday revenue, was initially rejected by the EFL last month because it did not apply to Championship clubs. It is believed the Premier League was not prepared to provide funding to second-tier teams that were not showing signs of overwhelming hardship, particularly those who could afford to sign players in the transfer window.

However, the impasse seems to have been broken after the Premier League said the 24 Championship clubs could apply for hardship funds on a case-by-case basis.

After the 72 clubs met by division on Thursday, the EFL said in a statement: “Following a comprehensive debate in all three divisions, a collective agreement in principle was made to move forward and finalise the negotiations, with Championship clubs making it clear today that they wanted to ensure their colleagues in League One and League Two received the proposed £50m financial support package to cover gate losses for 2019-20 and 2020-21 as soon as is practically possible.

“Championship clubs also acknowledged that discussions in respect of the levels of support they will receive will remain ongoing.

“The EFL believes that today represents a significant step forward and is hopeful that a final agreement on the short-term rescue package across all three divisions can be reached imminently which will provide much needed support, clarity and certainty for all EFL clubs at a time when they need it most.”

Earlier this week, Premier League chief executive Richard Masters told a Parliamentary committee that he is “confident we can reach an agreement” with the EFL over emergency funding.

Masters said: “The Premier League has engaged and wants to seek resolution but there can’t be a blank cheque or an underwriting of losses.

“We believe our proposal is appropriate and goes to the heart of the problem and is in line with Government policy on how it deals with other sectors.

“We believe we are stepping up and helping the pyramid of football, we have yet to reach an agreement with (EFL chairman) Rick Parry but I am confident we can do that.”

Julian Knight MP described the failure to reach an agreement as a “farce” at a Digital, Culture, Media and Sport Committee meeting on Tuesday, and warned Masters that 10 Football League clubs were unlikely to make payroll this month without a financial bailout.

The Premier League advanced some £27.2m in solidarity payments to League One and League Two clubs earlier this year.

Image: Lincoln City FC