Michel Platini today told the European parliament that UEFA are considering capping spending by clubs and suggested that Manchester City's pursuit of Kaka had increased the need for action.

The UEFA president has been a critic of outlandish buying by Europe's elite clubs - much of which is based on borrowed credit or the personal spending of wealthy benefactors - and insists it is the clubs themselves who have requested the move.

"European clubs are telling us that our system is in danger of financially imploding in the medium term," Platini told MEPs in Brussels.

"In consultation with them we are looking at limiting to a certain degree a club's expenditure on staff - salary and transfer fees combined - to an as yet undecided percentage of their direct and indirect sporting revenue."

Platini hinted discussions over a salary cap were accelerated by one club's "astronomical bids" last month. Although he did not name Manchester City, who are owned by Sheikh Mansour's Abu Dhabi United Investment Group, he appears to have been referring to their move for Kaka.

City were willing to pay AC Milan £108million and Kaka wages of £250,000 per week but the forward decided to stay at the San Siro. "During this year's festive season, one club which had suddenly become very rich made various astronomical bids in the transfer market," said Platini.

"Of course, there was a tremendous outcry in the football family, people called it outrageous and scandalous.

"Is it acceptable to offer such sums of money for a single player? Many people have responded by talking about limiting players' wages by introducing a European salary cap."

Platini said that clubs such as Real Madrid and Manchester United are not immune to the global economic downturn and regulation must be put into force.

"For the past 15 or 20 years, we have grown tired of hearing that the market regulates itself perfectly, that excesses and imbalances will disappear of their own accord and that the growth of income in football is an endless upward spiral," he said. "We now know none of this is true."

Platini stressed this was "only the beginning of the discussion" and any legislation limiting spending would only come in "on a consensual basis and with a view to strengthening this system".