English football has built up a debt mountain of £3bn ($5.2bn) and requires strong regulatory supervision to increase transparency and prevent clubs from going bankrupt, the game’s most powerful chief said on Tuesday.

Lord Triesman, the Football Association’s chairman, used a speech in London to plot a radical route map for the game, including a sports law to clarify lines of responsibility and a review of the Premier League’s “fit and proper person” test for club owners.

The former Labour minister took over the FA chairmanship in March with a brief from the government to set the much-pilloried organisation on a new course. Tuesday’s first outlines of a new strategy, which would see the FA become a more forceful regulator, threatens to set off a power struggle with the dominant Premier League.

Comparing football’s debt problems with those in financial institutions, Lord Triesman said the £3bn “poses very tangible dangers”. More clubs were in trouble, he said, weighed down by agents’ fees and a wage bill rising by nearly 12 per cent a year on average.

The debt problem was compounded by lack of transparency, he said. “Finance, ownership, agents, third-party ownership – none of it is transparent enough ... It cannot go on.”

In a swipe at the dominance of the big four clubs in the Premier League, Lord Triesman said competition had narrowed excessively. While the strongest clubs attributed success to their entrepreneurship and drive, “we are on the way to monopoly conditions”, and a regulator was needed to increase competition.

Lord Triesman also appeared to align himself with football’s European and international governing bodies, Uefa and Fifa, in raising doubts about the spread of foreign ownership in domestic leagues.

While not against foreign ownership per se, the Premier League’s “fit and proper person” test was insufficiently robust, he said, warning that if football did not review the process, the government would.

“What we can’t have is a system where someone like Robert Mugabe could own a club, and someone like Nelson Mandela never could,” he said. The scrutiny needed to cover human rights records and prevent anyone owning more than one club.

Loyal football fans “resent cavalier ownership or ownership they cannot identify” with, and the game risked a widening gulf between the club and its community. A sports law, he added, would solve the problem of a plethora of bodies responsible for too many parts of football.

Speaking at the same conference, Richard Scudamore, Premier League chief executive, gave Lord Triesman’s views short shrift, saying it would be mistaken to suggest all debt was untenable.

“Debt to a degree is healthy ... What is important is that the level of indebtedness has got to be in proportion to your income,” he said. Debt, he added, was on a 1:1 ratio with overall revenues in the game.