Crystal Palace face being kicked out of Europa League as Lyon's relegation from Ligue 1 is overturned
Uefa officials now have to rule on whether the FA Cup-winning Eagles can take their place in the Europa League.
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But the signs are that Nyon bosses will rule that Palace 's failure to meet their requirements on clubs under multi-club ownership means they cannot play in the same competition as the French outfit.
That's despite US businessman John Textor selling his shares in the Selhurst Park side.
And that will see Palace forced to drop down to Uefa 's third competition, with Nottingham Forest promoted in their place.
Uefa will now have to make a call after Lyon's appeal to French football's financial regulator, who relegated them over the club's soaring debts, was successful.
Lyon had cut a deal with Uefa that they would be allowed to play in the Europa League if their appeal was won but that they would give up any rights to play in European competition if the appeal went against them.
In order to satisfy financial chiefs in Paris, Lyon had to find nearly £100m up front by the hearing, with guarantees for another £100m on top.
Textor, whose Eagle Football Group also owns Brazilians Botofogo and Belgian side Molenbeek, was kicked off the Lyon board after the initial hearing.
It was his 44.9 per cent stake in Palace - despite being kept at arms length from decision-making by chairman Steve Parish and Americans Josh Harris and Dave Blitzer - that meant the club fell foul of Uefa rules.
Under those regulations, Palace needed to prove that none of their major shareholders had a significant position at any other club by the March 31 deadline.
However, Palace were not expecting their FA Cup success - the first major trophy in their history.
Crystal Palace could be KICKED OUT of Europa League before a ball is even kicked
That surprise win over Manchester City saw the club suddenly faced with a Uefa hurdle, with Lyon's sixth placed finish in Ligue 1 giving them priority over the South East Londoners.
Reacting to the news, a Lyon statement read: 'Olympique Lyonnais welcomes the decision, made today by the DNCG, to keep the Club in Ligue 1.
"OL thanks the Appeals Committee for recognising the ambition of the new management of the Club, determined to ensure serious management in the future.
"The new management, supported by the commitment and dedication of our shareholders and lenders, is extremely grateful for all the support received both inside and outside the Club, especially from its supporters, collaborators, players, partners and elected officials.
'Today's decision is the first step to restore confidence in Olympique Lyonnais.
"We can now focus our attention on sporting objectives, fully preparing for next season.'
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