On the Premiership: Victory may be the ultimate vindication, but for Arsenal the memories of a famous Champions League win are already tarnished.

Less than 24 hours after Real Madrid scuttled back to Spain last week, stung with shame, the sniping began. Alan Pardew, the West Ham manager, accused Wenger of ripping "the soul out of British football" with his decision to field an entirely non-English side against the Castillans.

Without missing a beat, Wenger angrily suggested that Pardew's comments bordered on racism, and a notable footballing achievement was consigned to the dustbin of history.

It was a silly squabble. Pardew's comments bordered on the presumptuous, while Wenger should know better than to indulge in hysterical invective. Pardew is no racist: as a player, he was part of the dynamic Crystal Palace side which helped blaze a trail for black players in the late 1980s.

As West Ham's manager, he has made Anton Ferdinand, Danny Gabbidon, Nigel Reo-Coker and Marlon Harewood the spine of his team. If his comments about Arsenal smacked of anything, it was mild xenophobia.

Wenger doubtlessly regrets his choice of words, but his ire may have been stoked by a genuine grievance. Wenger owes nothing to British football. His job is to win silverware for Arsenal and by that rationale he has been staggeringly successful.

The Gunners fans who held up tricolours and bellowed the names of Patrick Vieira and Thierry Henry after the club's spectacular triumphs were certainly not griping at their side's Gallic graces.

Besides, Wenger has always been able to point to the development of Ashley Cole and the signing of Theo Walcott as proof that he is not entirely blind to the virtues of home-grown talent. There have also been several players - Jermaine Pennant, David Bentley, Julian Gray and Matthew Upson among them - who have been reared in the footballing arts at Highbury only to find their first-team niches elsewhere.

The issue at stake is not Wenger destroying the soul of British football or Pardew's "little Englander" mentality, but rather understanding why young native talent is not taking root in the Premiership. For this problem is not confined to the leafy streets of north London: throughout the league, clubs are abandoning the policy of self-sustainment and opting for the quick fix of foreign imports.

Money, inevitably, is at the heart of the matter. When the transfer market began to inflate at an exponential rate in the mid-1990s, the initial reaction was one of feverish excitement. But with every eye-watering deal brokered - the record British fee paid for a player went from £3.75m to £15m in just three years - the stakes shot up to the point where the domestic market became utterly unsustainable.

Those heady days have left a dark legacy. There is nothing wrong with protecting your own markets, but British football has become prohibitively expensive, with average players being valued at extortionate prices, and the result is that managers - and not just the foreign ones - are looking elsewhere for the best deals.

Stuart Pearce, who probably has the St George's cross tattooed on his teeth, used some of the money raised through selling Shaun Wright-Phillips, one of England's brightest hopes, to buy the Greek forward Georgios Samaras for £6 million. If Pearce's conscience wobbled then, his concerns will have been eased at the £15 million he still has left over from the Wright-Phillips deal, which remains perhaps the most ludicrous example of a transfer market gone mad.

When the cost of players goes up, so does the price of failure. Top flight status has always been essential to a club's sporting credibility, but now it is also a financial necessity.

Each Premiership place is worth around £470,000; relegation will cost around £15 million, hence the atmosphere of barely contained terror at the Birmingham-West Brom slugfest on Saturday.

Demotion dents pride and destroys finances: in the last eight years, at least eight clubs have plunged into, or near, administration after being relegated from the Premiership.

Put simply, managers cannot afford to take a risk on young English players who do not possess the nous to ensure top-flight survival. Even clubs who have traditionally relied on a strong youth system are beginning to adjust their priorities. Charlton released nine youngsters last week, including a member of the England under-19 squad.

"I made my debut for West Ham at 16," said their manager Alan Curbishley. "Clubs could do that then but not now, with the stakes so high. The lads that I released were nowhere near the first team; they weren't even in the reserves."

England are lucky that they are currently well-stocked with world-class performers, but if Premiership clubs remain blinded by big bucks and refuse to let their youngsters off the leash, nothing will change. The national side's so-called "golden generation" will one day fade to grey and after that, the prospects are grim.