Manchester City have announced a record loss of £197m, the largest deficit a club has had in English football.

The North West club, who is owned by billionaire Sheikh Mansour, fell in the financial year after bankrolling huge figures on transfer fees along with astronomical wages for the squad.

During the 2010/11 year the blue half of Manchester forked out huge fees in order to bring in Edin Dzeko (£27m), David Silva (£26m), Jerome Boateng (£10.5m), Yaya Toure (£24m), Mario Balotelli (£24m), Aleksander Kolarov (£19m) and James Milner (£26m).

The loss will raise eyebrows over whether the Premier League side will be able to comply with UEFA's 'financial fair play' rules, which will require the governing body to monitor every club's accounts from 2011 until 2014, when the ruling comes into action.

The new system means that every club in Europe must not record a loss higher than £38.5m in those three years.

The club's chief operating officer Graham Wallace said: "Our losses, which we predicted as part of our accelerated investment strategy, will not be repeated on this scale in the future.

"These financial results represent the bottoming out of financial losses at Manchester City before the club is able to move towards a more sustainable position in all aspects of its operations in the years ahead.

"As we undertake the club's commercial transformation, we are cognisant of the incoming UEFA financial fair play regulations and consequently we continue to maintain positive and ongoing dialogue with all appropriate football authorities."

The second largest detrimental loss was £141m which occurred in the second year of Roman Abramovich's ownership at Chelsea in 2005.