Portsmouth will be prevented from buying new players until further notice after the Premier League placed an embargo on the troubled club.

The development is the latest twist in the long-running saga of off-the-field problems at Fratton Park and means, unless the embargo is lifted in the next two months, Paul Hart, the embattled manager, will be unable to bolster his squad when the transfer window reopens in January.

It is understood that ban relates to monies still owed on the purchase of two players - Glen Johnson and Lassana Diarra Johnson, the England right back, signed from Chelsea in August 2007 for a fee of £4million but moved on to Liverpool for £18m in June this year.

The Premier League will review their decision once they are satisfied that the clubs who are owed money have been paid. However, Gary Double, Portsmouth's director of communications, said the club were confident the problem would be resolved within days.

"This concerns unpaid money to other clubs and it is in the process of being sorted," he said. "We are confident the situation will be sorted by the end of the week."

Diarra joined Portsmouth from Arsenal in January 2008, for a fee believed to be £5.5m, but the aggressive midfield player was sold on to Real Madrid 12 months later for £20m.

The embargo prevented Hart from registering Eugen Bopp to play in the Carling Cup fourth-round tie against Stoke City at Fratton Park last night, which Portsmouth won 4-0. Bopp is a free agent, having been released by Crewe Alexandra at the end of last season. The midfield player has been training with Portsmouth since the summer.

The Premier League have introduced the sanction under new rules that came in at the start of the season. A high proportion of transfer deals involve instalments and Portsmouth's failure to meet their payments has led to today's announcement. An instalment owed on the move of Tommy Smith, the striker, from Watford to Fratton Park for a fee of £1.8m two months ago was paid last week.

Ali Al-Faraj completed his takeover of the club earlier this month and assured Hart he would have money to spend in the January transfer window. The Saudi oil tycoon bought 90 per cent of the financially-stricken club in a deal which saved them from administration. Hart was forced to cash in on Glen Johnson and Peter Crouch during the summer to raise funds.

Today's development is the latest twist in an increasingly troubled season for Portsmouth. The club were banned from buying players during the summer when it was thought they were on the brink of administration. The embargo was lifted after Sulaiman al-Fahim bought Portsmouth, but his tenure lasted 44 days as his promises of financial help fell through - with the players not being paid on time last month.

Last week Hart called on the club to stick together after the news that Peter Storrie, the chief executive, was to be charged with tax evasion. Storrie has promised to defend himself “in the strongest possible terms” against allegations that tax was not paid on a signing-on fee of £250,000 given to Amdy Faye when he moved from Auxerre to Portsmouth for £1.5m in August 2003.

Portsmouth lie bottom of the Premier League with only one win in ten matches.