A world away from qualified majority voting, EU leaders yesterday granted a stay of execution to professional football's transfer system, backing Brussels' efforts to work out a compromise with the sport's authorities. But they warned that any agreement must comply with community law.

The British delegation, which has campaigned against radical changes to a system that, according to the European Commission, flagrantly contravenes EU laws on fair competition and the free movement of labour, said it was satisfied with the declaration in Nice "on the specific characteristics of sport".

The British Prime Minister, Tony Blair, and the German Chancellor, Gerhard Schroder, intervened jointly in the long-simmering dispute earlier this year, arguing that the abolition of transfer fees would endanger smaller European clubs because their best players could be poached without any compensation.

Leading football figures fear that the game will be plunged into chaos if Mario Monti, the European Commission's competition commissioner, outlaws existing rules, which would prompt a free-for-all as players move between clubs at will.

A British government adviser said the football authorities are trying to reach a compromise. "Our position remains that, while of course we acknowledge the competition rules of the union, transfer fees play an important part in the viability of clubs, particularly small clubs. The commission, we believe, knows that and recognises that and wants to preserve it."

The Nice declaration will take some of the heat off FIFA, football's international governing body, which is under pressure from the Commission to come up with satisfactory new rules before the present regulations are outlawed.

The Commission said earlier this week that it was hopeful of finding a satisfactory solution. It recognised that the stability of contracts was important, it said, but underlined that FIFA rules "must respect the overriding EU principle" that workers should have freedom of movement.

British delegation officials said yesterday they were "absolutely happy" with the Nice declaration, which was "fully in line" with the joint Anglo-German statement.

Blair and Schroder said last month that while the current system was not perfect, "a radical reform could have a negative impact on the structures of football in Europe".

"Clubs must be able to rely on a system that gives them sufficient opportunity to train young players, build up their teams and keep the game healthy at all levels," the leaders said, adding that they hoped the Commission would be sympathetic to the special needs of professional football.