An independent football regulator (IFR) will not jeopardise England’s participation at Euro 2028 or Premier League clubs playing in Europe, despite reports to the contrary.

That was the message from sources at Uefa and the Department for Culture, Media and Sport (DCMS) on Sunday after a leaked letter from European football’s governing body to the culture secretary, Lisa Nandy, warned there should be “no government interference in the running of football”. However, Uefa sources have insisted that the letter from its general secretary, Theodore Theodoridis, was mostly positive and that its concern was less about the independent football regulator and more about the extent of its powers.

Theodoridis’s letter, which has been seen by the Guardian, stresses that it was “encouraged by the intent of the original fan-led review”. However it reminds Nandy that the intention was that “this regulatory area should be returned to the FA [Football Association] in time”.

Uefa’s biggest concern is about the potential for what it calls “scope creep” within the IFR. “While the initial intent of the IFR is to oversee the long-term financial sustainability of clubs and heritage assets, there is always a risk that, once established, the IFR may expand its mandate beyond these areas,” the letter states.

“This expansion, intentional or otherwise, into broader aspects of football governance could undermine the established structures and processes of the sport, and amount to government interference.”

Theodoridis then lays out the potential consequences for such interference. “We have specific rules that guard against this in order to guarantee the autonomy of sport and fairness of sporting competition,” he writes. “The ultimate sanction for which would be excluding the federation from Uefa and teams from competition.”

However, Uefa sources have stressed to the Guardian that such a threat would be a last resort and the possibility of England’s exclusion from Euro 2028 – which will be co-hosted by the UK and Ireland – or Premier League clubs missing out on Europe remains extremely unlikely. Sources at the DCMS have also played down fears of such a punishment.

The DCMS is expected to respond to Uefa’s letter shortly but has stressed that there have been no previous concerns raised by European football’s governing body, which has been engaging alongside the Football Association with the new government over the development of the bill.

A DCMS spokesperson said: “The football governance bill will establish a new independent football regulator that will put fans back at the heart of the game, and tackle fundamental governance problems to ensure that English football is sustainable for the benefit of the clubs’ communities going forward.”

The campaign group Fair Game, which has long been calling for an overhaul in football governance, also dismissed concerns of a potential sanction for English football. Its chief executive, Niall Couper, said: “The DCMS have been over this ground a hundred times. This is nothing short of a scare story.

“With 58% of the top 92 [clubs in England] technically insolvent, annual losses of £10m a year in the Championship viewed as a success, football is an industry in desperate need of financial reform. The government should not be derailed by such nonsense.”

Issuing its own statement, the Football Supporters’ Association said: “We are confident there’s no risk to England’s participation in tournaments – for all the slightly lurid headlines, the regulator will be fully independent of the government as it aims to strengthen financial sustainability, improve supporter engagement and prevent the participation of clubs in a breakaway European Super League.”