UEFA have rejected Real Madrid's request to register both Lassana Diarra and Klaas Jan Huntelaar to play in the Champions League knock-out stages.
The regulations state that only one player who has already played in Europe this season can be registered, but Madrid had appealed to the governing body, claiming they had a ‘different interpretation’ of the rule.
But UEFA's disciplinary committee rejected their request when it met today.
Holland striker Huntelaar and midfielder Diarra played in the UEFA Cup for Ajax and Portsmouth respectively prior to both players agreeing deals which saw them move to Madrid on 1 January.
A UEFA statement read: ‘UEFA tonight confirmed that its Control and Disciplinary Body has reviewed the request of Real Madrid CF to be able to register two players who have already competed in UEFA competition this season as part of their A-list squad for the knockout rounds of the UEFA Champions League.
‘The European body confirms that this was rejected in accordance with article 17.18 in the competition regulations which states that only one player who has played UEFA club competition matches for another competing club in the current season may exceptionally be registered. Any appeal to this decision will be heard next week.’
Madrid are now expected to take their case to the Court of Arbitration for Sport.