The European Commission and the Spanish government are to exammine a property deal reported to have netted Real Madrid €480m, the EU have confirmed.

The club’s sale of its training grounds to the City of Madrid in 2001 wiped out its debts and paved the way for the club to continue to buy the world’s most expensive players such as Zinedine Zidane, Ronaldo and David Beckham.

A spokesman for the European Commission said the City of Madrid had re-zoned the training grounds for development, a process which in turn increased its value, and then bought the site.

If the city paid more than a private purchaser would have, it would amount to a hidden state subsidy and Real Madrid would have to pay back the government, the Commission said.

“We believe there may be certain state aid elements attached to this,” Tilman Lueder told a daily news briefing.

“We believe the City of Madrid may have overpaid.”

The sale of the training ground to the Madrid city council and regional government for office buildings cleared Real Madrid’s huge debts of €270m and enabled the club to embark upon an unprecedented spending spree which brought big-name players to the club. Moreover, the money realised was ploughed into a state-of-the-art training complex on the city’s outskirts.

Spanish newspapers reported that the deal in April 2001 netted Real Madrid €480m.