Just months after £629m bid by the satellite broadcaster for Manchester United was rejected on competition grounds, BSkyB has agreed to buy the stake in its less illustrious rivals.

BSkyB already owns a 9.08% stake in Premiership leaders Leeds United.

Broadcasters see holding a stake in major clubs as a way to gain influence in future rights negotiations, with the possibility of clubs coming to individual agreements.

On the way up?

Football Association rules allow no single company to own more than 10% of any one club.

First Division Manchester City can expect to make about £12m from the deal with BSkyB, which also includes £2m for the broadcaster to have global rights as the club's media partner.

BSkyB will have a representative on City's board, and further money will be raised from a new rights issue to existing shareholders.

Although City have languished in the lower leagues in recent years, the club has a strong supporter base and is currently leading the chase for promotion to the Premiership.

City chairman David Bernstein said: "We have broken historic ground today and I'm sure it will delight our fans.

"We have massive support and BSkyB have recognised that.