Rangers and Celtic hoped to be part of proposals by Bolton Football Club’s chairman Phil Gartside for a two tier-league of 36 to 40 sides.
It would have enabled the Glasgow giants to join the lower section of the league and attempt to win promotion to the top tier, made up of 18 clubs.
But the Premier League rejected Mr Gartside’s proposal as neither ‘desirable nor viable.’
The bid provoked debate about whether the clubs would have been welcomed south of the border by rival clubs such as Manchester United, Liverpool, Chelsea and Arsenal.
There was hostility from the Premier League’s 20 club chairmen when Mr Gartside announced his proposal six months ago.
But Martin O’Neill, the former Celtic coach who is now in charge of Premier League Aston Villa, and Tottenham’s manager Harry Redknap backed the idea.
Now any immediate prospect of the two clubs boosting their financial situation by moving to England has been killed off.
Any such switch would have been beneficial to financially stricken Rangers which has announced debts of £31.7m to Lloyds Banking Group.
In a statement, the Premier League said: “Bolton Wanderers submitted a discussion paper detailing ideas concerning the restructuring of the Premier League into two tiers with the inclusion of Celtic and Rangers.
“The clubs welcomed the additional input into an ongoing process, however, they were of the opinion that bringing Celtic and Rangers into any form of Premier League set-up was not desirable or viable.
“The other relevant ideas contained within Bolton’s paper will now be taken forward as part of the wider strategic review being undertaken by the Premier League since November 2008 with the aim of providing recommendations before December 2010.”
Mr Gartside wants to see the pot of money shared among the Premier League clubs more equally after it was aevealed that Manchester United, the champions, earned £52.3million from television rights in contract to struggling West Ham’s £31.6 in fees.
Richard Scudamore, the chief executive of the Premier League, said it was unlikely the clubs would vote to allow the Old Firm into England before the formal announcement.
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