The boss of football's governing body has welcomed the EU's recognition that sport has a special status, but has called on further progress on the issue of player transfers.

He believes that can be made at a meeting this week.

EU leaders have adopted a declaration at their summit in Nice recognising the "social, educational and cultural functions inherent in sport and making it special".

The declaration paid lip service to sports federations' demands for special treatment.

But it fell well short of Fifa and Uefa's demand for a special exemption from EU law to end its wrangle with the European Commission over transfers.

International football authorities had wanted a legally binding protocol giving such an exemption written into the EU's treaty. That exemption was not forthcoming.

"I am convinced that in a meeting we will have in Brussels on Wednesday, 13 December, we will make a breakthrough," Blatter said, speaking at Fifa's end-of-year executive meeting in Rome.

Fears of chaos

"We do not have a protocol but the political will exists," he added.

"We have succeeded in having people admit the need for a text specifying what pertains to sport and what pertains to the economy."

A Fifa-led task force will use Wednesday's meeting with EC officials to negotiate a new transfer system before the Commission declares Fifa's existing system illegal.

Leading football figures fear the game will be plunged into chaos if the Commission outlaws FIFA's rules, putting the squeeze on small clubs and prompting a free-for-all as players move between clubs at will.

Conditional agreement

The Commission argues the existing set-up breaks EU laws unfair competition and the right of all workers to ply their trade freely in the Union.

Meanwhile, Blatter said on Sunday it was open to the idea of sponsors' names on national team shirts but insisted they would not be allowed at the 2002 World Cup.

He said: "There is a certain trend or tendency towards a 'yes', but it is a 'yes, but a conditional yes,"

"There is also another proposal which would allow referees to wear adverts on their sleeves and shoulders during domestic matches."

Hands tied

The matters will be discussed at the Rome meeting.

Asked about North Korea's possible co-hosting of the 2002 World Cup alongside South Korea and Japan, Blatter said Fifa was not yet in a position to decide.

"We cannot take the first step on this," Blatter said. "Fifa's door regarding such a solution is open until December 2001 when we have the draw for the tournament."