Reading have pulled their under-21s out of a newly-created competition by the Premier League in another alarming development at the crisis-hit club.

Days after American businessman Rob Couhig’s protracted takeover collapsed, under-fire owner Dai Yongge will come under renewed scrutiny after withdrawing the club’s youngsters from the National League Cup.

Reading’s academy has nurtured the likes of Bayern Munich’s Michael Olise in recent years and the under-21s were initially expected to take part in the competition, which starts next month, but the decision is understood to have been made to cut costs.

All of the games in the National League Cup are scheduled to be played at the grounds of non-league clubs, so Reading’s withdrawal will save costs on travel and possibly even overnight hotel stays.

However, the surprise decision to remove the under-21s will raise fresh concerns over the future of the club’s academy teams at Bearwood Park.

The Premier League have devised the new competition in a bid to boost elite development, with 16 non-league clubs to be pitted against 16 Premier League 2 clubs with Category One academies.

Reading replaced by Derby

Reading were initially selected to play in Group A with Brighton, Fulham, Southampton, Aldershot, Maidenhead, Wealdstone and Woking. They have since been replaced by Championship club Derby County.

In June, Reading’s womens’ team withdrew from the Championship amid financial concerns after savage cuts across the board.

Last week, former Wycombe Wanderers owner Couhig’s takeover fell through after an alleged breakdown in negotiations with Yongge. Couhig had agreed exclusivity months ago and even attended matches but was unable to close an agreement to acquire the League One side.

Managed by Rubén Sellés, Reading are currently 16th in League One and have incurred a total of 18 points deductions under Yongge for breaching various regulations.