Martin Bain, the Rangers chief executive, has accused Scottish clubs of creating a “professional transfer market” for children as young as ten. His outspoken comments have revealed a growing rift between the Old Firm and the ten other Scottish Premier League clubs over the issue.

“We are now seeing that the system is working against the rights of children and their parents, and that cannot be the right direction for Scottish football,” Bain said. “We support the principle of compensating clubs for development costs, but what is now happening is the creation of a professional transfer market for children at a very young age.”

The SPL clubs voted 10-2 to increase the compensation payments at a meeting in January. A compensatory formula for clubs in the youth initiative programme — not all of whom are in the SPL — was introduced in 2006 because clubs pointed out they were investing time and money in developing young players, yet risked losing them with minimal compensation to other clubs as they got older.

The payments were set at £3,000 a year for 12, 13 and 14-year-olds; £6,000 for 15-year-olds, and £9,000 for 16 and 17-year-olds. In January, it is understood these were upped to £5,000 a year for 11 to 14-year-olds; £10,000 a year for 15 to 17-year-olds.

Although these new bands have still to be ratified by the SFA, they would mean that a 14-year-old boy who had been with Club A since he was 11 would need to find a club willing to pay £20,000 for him if he wanted to move. Similarly, it would cost £50,000 for Club B to get the boy if he was 17 and had been with Club A since he was 11.

“We made strong objections to the SPL regarding their latest decision to increase development contribution compensation payments,” Bain said. “No doubt other clubs believe that we are acting solely out of self-interest but that is not our motivation.

“We are thinking about the rights of kids and also the development of young Scottish talent, which is crucial for the future of the game in Scotland.”

Bain’s comments are only the tip of the iceberg. The Ibrox club believes the youth initiative programme faces potential problems with employment and civil rights law.

The row has come just days before the expected publication of the review of grassroots football in Scotland by the former First Minister, Henry McLeish. And in a separate development, a petition has been lodged with the Scottish Parliament asking MSPs to investigate alleged abuses in the youth initiative programme.

An SPL spokesman said: “Development contribution is designed to ensure that those clubs who spend huge amounts of effort, time and money in developing and training a young player receive a contribution towards this investment when another, often financially stronger, club wants to take that young player from them.

“In the absence of a robust system, far fewer clubs in Scotland would invest in youth development.”