Leicester City cannot be deducted any points in the second-tier Championship if they are convicted of any violations of the Premier League's spending rules, the English Football League (EFL) said on Friday.
Leicester, who were relegated from the topflight last season, were referred to an independent commission by the Premier League last month for alleged violations of the league's spending rules.
The Championship's governing body EFL wrote to the Premier League saying they would apply any sanction handed down on Leicester while they are still in the second tier, a move Leicester opposed.
However, the EFL said they later changed their position in a letter to the English FA's League Arbitration Panel (LAP).
"EFL has confirmed to all parties that... it does not have the power under the Regulations as currently drafted," the EFL said in a statement.
Leicester said they will continue to co-operate with Premier League and the EFL with regards to the charges against them.
"Any charges against the Club should be properly and proportionately determined, in accordance with the applicable rules, by the right bodies, and at the right time," Leicester said.
The LAP said that the Premier League Disciplinary Commission's proceedings against Leicester will not be expedited to conclude by May 4 due to any possible points deductions not being applicable this season.
Leicester are top of the standings in the Championship with 88 points from 41 matches as they seek a promotion back to the Premier League.