Manchester United boss Sir Alex Ferguson believes clubs are being forced to look elsewhere for future talent due to Academy restrictions.
The Scottish tactician is keen to add Britain's best and brightest to the Red Devils' academy, although travel restrictions limit who the club can sign.
FA guidelines state youngsters under 12 have to live within an hour's travel time of the club and that is forcing the likes of United, Arsenal and Liverpool to look elsewhere.
"The academy system I don't think is working, because there's an hour's restriction on travel," stated Ferguson.
"Manchester United, and, particularly Arsenal have to look somewhere else and other clubs are doing it, now Liverpool too are venturing into Spain in a big way.
"We're having to look world wide to get the best young players into our club, because the expectation and need for Manchester United to do well, so that's a big problem.
"That needs a lot of soul-searching from the people who operate the academies. Something has to be done I think. It's in danger of falling apart."
Arsenal have often been criticised for preferring foreigners over home-grown talent, but Ferguson believes the fault lies with the system - not Arsene Wenger.
"Your obvious slant is towards Arsenal," he continued on the lack of British talent in the Premiership. "Arsene Wenger is very strong on French football and African players.
"Why should he not take advantage? The problem doesn't lie with Arsene Wenger, it's with the system.
"When the academies were set up, Howard Wilkinson said England would win the World Cup within 10 years. Well, they have been going eight now and I can't see it."
Gary Neville recently hit out at agents and Ferguson has revealed an agent had to be banned from the club's Carrington training ground for 'tapping up' youngsters.
"In an ideal world he (Neville) is correct. There's nothing wrong with players taking advice.
"I say investigate the payments they have. They're taking a lot of money out of football, that's obvious.
"So much so that they are able to buy players. That's a dangerous precedent because then they can control the market.
"If they have a responsible attitude towards the industry then there's nothing wrong with that.
"We had a situation recently with an agent coming to the academy and tapping up young players from 12 years of age.
"We barred him - so he started to wait outside the academy picking out the cars of the parents, stopping them and tapping them up."
So many restrictions for wat??..!!