Mandic’s company, Max Sport, received a payment of around £2million as part of the transfer.

There is an Australian-based subsidiary, entitled Sports Corporation International, for whom Mandic's brother, Nikola, works and it is he who is recognised by FIFA.

As there was an international dimension to the case, the FA had agreed with FIFA they should take up the matter and decide whether any disciplinary sanctions should be imposed.

However, after deliberating over the complex issue, the judge on the FIFA players’ status committee has now ruled the world governing body “does not have jurisdiction to pass a decision… because Harry Kewell’s transfer was not an international one”.

The FA are understood to be very disappointed at the outcome, given not only their agreement with FIFA over multi-jurisdiction cases but also at the 13 months which it has taken to be announced.

Officials at Soho Square will now digest the information which is to be passed back by FIFA and shall “consider potential action under its own regulations as a matter of urgency”.

A statement from the FA, released to PA Sport, read: “Following FIFA’s statement today regarding the transfer of Harry Kewell from Leeds to Liverpool, the FA can issue the following clarification.

“The FA conducted an investigation, following the transfer in the summer of 2003, into the possible involvement of an unlicensed agent.

“It was agreed between FIFA and the FA that the matter would be dealt with by FIFA. This agreement was based on the fact that matters containing an international dimension (in relation to any of the participants) come under the jurisdiction of FIFA.

“The FA therefore passed the results of its investigation to FIFA in August 2004. As a result of FIFA’s decision announced today, the FA will now review the information to be provided by FIFA and consider potential action under its own regulations as a matter of urgency.”

Earlier this year Arsenal were fined £10,000 (€14,700) by the FA after admitting the use of an unlicensed agent during the transfer of 18-year-old striker Quincy Owusu-Abeyie from Ajax in 2002.

Arsenal have also been given a suspended transfer ban, which will be activated in the event of a further proven breach of the regulations before FIFA or the FA.

The world governing body will, though, now not make any decision as to whether any rules were broken by either Kewell, Liverpool or Leeds following the Australian midfielder’s transfer two years ago.

However, once the FA have concluded their own investigation, FIFA will then examine if Nikola Mandic himself has a case to answer.

A FIFA statement read: “On July 29, 2005 in Zurich, Switzerland, the single judge of the FIFA players’ status committee considered the investigation carried out by FIFA regarding the transfer of the Australian player Harry Kewell from Leeds United to Liverpool and involving the Australian licensed players’ agent, Nikola Mandic.

“In this respect, the single judge decided that FIFA does not have jurisdiction to pass a decision on the involvement of the player Harry Kewell, as well as of the English clubs Leeds United and Liverpool in this matter, because Harry Kewell’s transfer was not an international one.

“In view of the fact that the transfer at stake took place between two clubs belonging to the same member association, the single judge concluded that the decision on the involvement of the player Harry Kewell, as well as of the clubs Leeds United and Liverpool in this matter falls under the jurisdiction of The Football Association.

“As far as the involvement in this matter of the licensed players’ agent Nikola Mandic is concerned, the single judge confirmed that FIFA has jurisdiction to consider and pass a decision on the involvement of the above-mentioned players’ agent in this transfer.

“However, the single judge decided that such a decision will be issued only once the Football Association has reached a decision on the involvement of the player Harry Kewell, as well as of the clubs Leeds United and Liverpool in this matter.”