Michel Platini has warned that even Europe's biggest clubs will have to "face the music" if they do not comply with UEFA's new financial fair play rules.
UEFA's latest figures show that financial problems affecting European clubs are getting worse, with spending on player wages up almost 10% - and increasing at a faster rate than income.
Under their new rules, clubs will face possible bans from European competition from the 2014/15 season if they spend more than they earn in the three years before.
Manchester City's recent £121million losses mean they are the club in England facing the greatest difficulty to abide by the rules - even though owners are also allowed to inject £12million a year (15m euro) into their club.
Leading Italian clubs also face problems but UEFA president Platini said whatever their stature, the European governing body would not hesitate to take action.
Platini, speaking at UEFA's headquarters in Nyon, Switzerland, said: "If a club doesn't fall in line and follow the same rules as everyone else then it will be time to face the music.
"Certainly it is not something we want to see.
"Our objective is not to put clubs into financial difficulty. Financial fair play is to help them escape from this devilish spiral and have a viable economic strategy in the long term.
"This is not a witch-hunt, this is so they no longer continue blindly and mindlessly."
Manchester City have already sent officials to meet UEFA about complying with the financial rules.
Andrea Traverso, UEFA's head of licensing, said: "We are in talks with the club - they are aware of the rules and they probably have a strategy to raise their income.
"They have been to see us and they are confident that they can manage this challenge."
Platini added: "Last year in Abu Dhabi I met up with the owner of Manchester City and he promised they would live with the rules and regulations."
The European Clubs' Association (ECA) has thrown their weight behind the new rules.
ECA chairman Karl-Heinz Rummenigge said: "It's time to step on the brake and bring a bit of rationality to football."