UEFA have rejected Crystal Palace's proposal regarding multi-club ownership rules.
As it stands, UEFA are set to block FA Cup winners Palace from playing in next season's Europa League.
With John Textor holding a minority share in Palace and owning fellow Europa League qualifiers Lyon, the Eagles face being blocked by UEFA.
Textor has offered to put his Palace shares into a blind trust, but UEFA insist the move has come too late. UEFA had set a deadline of March 1st for such a move to be made.
Such blind trusts saw Manchester United and Nice, which both count Sir Jim Ratcliffe as a shareholder, cleared to play in last season's Europa League.
The same approach was used by Manchester City and Girona, both owned by City Football Group, to play in the Champions League last term.