Reading become the second of Blackpool's Championship rivals to be slapped with a points deduction

The Royals have been docked six points for breaches of financial fair play rules, with a further six points suspended.

It drops them down to 19th place in the table, but crucially they remain four points clear of the relegation zone.

In a statement, the EFL revealed Reading's losses exceeded the accepted amount by £18.8m.

"It (the deduction) follows a review of the financial submission from the club for the four-year period 2017/18 to 2020/21 where it was determined the club had recorded a loss of £57.8m, £18.8m in excess of the £39.0m Upper Loss Threshold," the EFL said.

"Prior to the determination of the sporting sanction, full consideration was given to all relevant factors, including the guidelines used in previous probability and sustainability (P&S) cases and the mitigation put forward by the club.

"It was imposed in accordance with the terms of an ‘agreed decision’ which has formally been ratified by an Independent disciplinary commission chair as per the requirements of EFL regulations.

"The club has also agreed to adhere to a business plan focused on a number of financial targets, including controlling player-related expenditure, with the objective of moving the club towards P&S compliance in forthcoming reporting periods.

"The decision is final and not subject to appeal, with the Championship league table being amended with immediate effect."

Reading have been limited to signing free agents and loans since being placed under a transfer embargo.

Danny Drinkwater and Scott Dann were among those brought in on frees in the summer, while former Newcastle United striker Andy Carroll signed for the club this week.

Trevor Birch, EFL chief executive, said: “The EFL’s profitability and sustainability rules are in place to discourage short-term overspending and it is appropriate that the League takes the necessary action on behalf of its membership when a transgression occurs.

“The League is satisfied that the sanction for the breach, being imposed by way of an agreed decision, is proportionate having considered all the relevant factors and will continue to work closely with the club as it seeks to meet its obligations moving forward.”

It comes after Derby County were hit with a nine-point penalty for also breaching FFP rules.The Rams had already been docked 12 points for being placed into administration, taking 21 points in total away from their tally.

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