The saga of Socceroo Harry Kewell's controversial transfer from Leeds United to Liverpool continues to drag on as FIFA has handed its investigation into the deal back to England's Football Association (FA).

British newspaper the News of the World reported that Liverpool and Leeds faced a transfer ban for using an unlicensed agent, Bernie Mandic, in the STG5 million ($A12 million) deal in 2003.

But FIFA announced it would only investigate the matter if the FA could come up with evidence to warrant charges against Mandic's brother Nikola who is Kewell's licensed agent.

The FA believes Nikola Mandic could have breached the rules of player transfers and said it would reinvestigate the case "as a matter of urgency".

Nikola Mandic, however, says he did not become Kewell's agent until July 29, 2003 - three weeks after the midfielder signed his deal with Liverpool, which was completed by the player's lawyer Chris Farnell.

Kewell could also face punishment as any player who has used an unlicensed agent is subject to charges.

The controversy over Kewell's move stems from the STG2 million ($A4.82 million) paid by Leeds to Bernie Mandic's company Max Sport.

Mandic insists the fee was for two years work he did for Leeds in building a relationship with Australian club Sydney Olympic.

Bernie Mandic is Kewell's commercial manager and his fee was the central issue in a libel case Kewell settled against former England captain Gary Lineker in July.

Kewell sought damages over a "hurtful and humiliating attack" made by Lineker in British newspaper the Sunday Telegraph in which he wrote the Australian was a "fool" for allowing Bernie Mandic to make so much money out of the transfer.

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