Liverpool's Champions League match away to Atletico Madrid next Wednesday will be played at a neutral venue after Uefa punished the Spanish club for incidents of racist abuse and crowd trouble by their supporters during a game with Marseilles earlier this month. They have also been fined €150,000 (£120,000).

Atletico must play the fixture at least 300km outside of Madrid, but it has not yet been decided where it will be held. Atletico have already indicated they will appeal the decision.

Javier Aguirre, the club’s coach, has also been banned from the next two Champions League fixtures, home and away against Liverpool, for insulting Marseille players. Uefa have said that a third match ban could be invoked if there is a repeat of crowd trouble or racist chanting within the next five years.

William Gaillard, the Uefa spokesman, explained the punishment was designed to show that racism would not be tolerated. His comments comes 24 hours after the FA said they would not play a friendly against Spain in Madrid fearing a repeat of the racist abuse they received during a match in 2004.

"I understand the fears of the [England] players," Gaillard said. "That is exactly why we are acting with renewed strength - to make sure that in the future England players will not be threatened by this kind of behaviour.

"We think sanctions like the ones we have taken are conducive to making it possible for clubs and national teams to play in Madrid without this kind of threat of racist behaviour."

Liverpool have complained at the "disruption" caused to their supporters by the decision to move the game.

"To say the decision is a bit late in the day, is to put it mildly," Rick Parry, the chief executive, said. "We have 3,000 fans going to the game and we are extremely concerned for our supporters, the vast majority of whom have already made travel arrangements.

"If the match is played at least 300km from Madrid, it will cause major disruption, inconvenience and large additional expense for our fans.

"Uefa have to take their needs into account when making a final decision on the game."

Fernando Torres, who joined Liverpool from Atletico Madrid in July 2007, is devastated by the news. "After so much time waiting, it is the worst and most unexpected news that I could have heard this morning," the 24-year-old said. "I'm eager to go back. I don't know if it is definitive, I hope that a solution can be found.

"It is a shame that these incidents have forced the stadium to be closed, but if this is what happens then we have to accept it."

Atletico were found guilty of a lack of organisation that led to a number of serious problems. Visiting fans were "victimised" by police, according to Uefa, and no police escort was provided for the Marseilles team coach to and from the stadium, which was attacked by 'ultras' from the Spanish club.

Black journalists were racially insulted by Atletico fans during the match, Uefa say that and no provision was made for disabled supporters. Monkey chants were aimed at Marseille's black players, and Uefa added that Aguirre, the coach, repeatedly swore at Mathieu Valbuena, the Marseilles midfielder, calling him 'a son of a whore' among other insults.

The two-game punishment will also affect Atletico’s home match with PSV Eindhoven on November 26. Atletico are joint top of Group D with Liverpool after winning their opening two matches against PSV and Marseilles.