Wembley lost out on the 2010 final because of the tax rule
Wembley Stadium is in line to host the 2011 Champions League final after the government agreed to relax tax charges on overseas footballers' earnings.
The Treasury's U-turn means Wembley is now a strong contender to stage Uefa's showpiece final in 2011.
Uefa awarded the 2010 final to Real Madrid rather than Wembley because of taxation system for overseas teams.
If Wembley is awarded the final the event could be worth more than £30m to the economy from tourism visits.
Under current law, players could be liable to pay tax on earnings from bonuses and endorsements if they appear at UK events even if they are based overseas.
Staging the Champions League final not only improves our standing in the world, it generates valuable revenue for the economy
Simon Chadwick, Coventry University Business School
Football Association chairman Lord Triesman said: "Uefa has publicly acknowledged that Wembley would be an outstanding venue for the 2011 Champions League final, and we are hopeful that with the tax obstacle removed our bid will be successful.
"It is also a positive indication for our 2018 World Cup bid."
One of Britain's leading sports business professors claimed a London final would provide a £30m-plus boost to the economy.
Dr Simon Chadwick, from the Coventry University Business School, told BBC Sport: "It seems to make sense we waive the tax rule on player earnings and look at the much bigger picture.
"The country as a whole will benefit from staging the final, especially as the income generation will have a multiplier effect as it will continue to reverberate for some time as new tourists return.
"As a country, it's about time that we started to take sport much more seriously. Sport makes a major contribution to the social, cultural and economic life of our country, possibly contributing as much as 2.5% of GDP.
"Successfully staging events such as the Champions League final not only improves our standing in the world, it enhances the country's self-esteem and generates valuable revenue for the economy."
The cost to the Treasury is an estimated £1.5m a year but the tax has not been collected at similar events in the past, such as when the final was played between two Italian sides at Old Trafford in 2005.
A decision on the 2011 venue will be taken by European football's governing body in the autumn and Wembley will be favourites to be awarded the final.
Wembley last hosted the European Cup in 1992 when Barcelona beat Sampdoria.
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