York City chairman Douglas Craig today gave a cautious welcome to an historic agreement between football's two most powerful figures and the European Commission.

FIFA's president Sepp Blatter and his UEFA counterpart Lennart Johansson have sealed a broad agreement with the EC for changes to the transfer system.

The heads of the world and European football governing bodies have been encouraged by the EC's decision to accept for the first time the need for 'stability of contracts'.

Small clubs like City feared the worst should the transfer system be scrapped as it would cut off a vital source of income and could lead to some clubs folding.

Craig said he was encouraged by the latest developments in the long-running saga.

He said: "It is not as disastrous as might have been feared in the first place.

"However, I will reserve judgement until I see the actual details and the actual details have not been approved and do not look as though they will be approved until Friday at the earliest."

International players' union chief executive Gordon Taylor has dismissed suggestions that many lower-division clubs will fold if the transfer system is scrapped.

Under the agreement made by FIFA and UEFA yesterday, players will have significantly more freedom to move between clubs, especially later in their career, and will also increase their earning power.

This will lead to clubs spending increasingly more on wages than transfer fees.

However, Taylor insists that this will not signify a major change in the revenue of smaller clubs like York. "There's been a lot of spinning to say that it's the transfer system that's keeping everything alive. In reality, that's very arbitrary.

"You're a lucky small club if you can manage to find a good young player and sell him on these days.

The meeting confirmed both sides are agreed on the following:

* Players' contracts to be a minimum of one year and a maximum of five years.

* Compensation paid if young players, aged 18-23, move clubs.

* Creation of an independent arbitration panel to rule on compensation disputes, though players and clubs will still have recourse to the courts system in their countries.

* The creation of 'solidarity mechanisms' of revenue distribution, basically some form of distributing funds to make sure poorer clubs survive.

* The creation of fixed transfer periods, probably one in summer and one in winter.

Updated: 12:47 Thursday, February 15, 2001