The Geordies had acquired a hugely talented player, widely tipped as an England regular of the future. Cash-strapped Forest had received a handsome transfer fee to help reduce their estimated £20m debts. And 18-year-old Jenas had joined one of England's elite clubs.

Proactive Sports Group, the Aim-listed football agency that represents Jenas, also had reason to celebrate: under Football Association and Fifa rules, it is entitled to up to 5 per cent of the transfer fee.

For companies like Proactive, the past decade has been a gold rush. Transfer fees have ballooned and sports management has become a multimillion-pound industry almost overnight.

But it is also increasingly competitive: getting a slice of the most lucrative deals depends more and more on who you know. And even some Premiership managers, who decide which players their clubs buy and sell, now stand to benefit personally from such transfers. In a joint investigation with BBC Radio 5 Live's On The Line, The Observer can reveal that a number of top-flight managers have become shareholders in the football management agencies brokering the deals.

One old associate of Jenas was not so pleased to hear about the talented teenager's arrival at Newcastle. Robert Matusiewicz's Nottingham-based firm Ambition Management represented Jenas for years, before being dumped just days before his money-spinning move to the North East.

In mid-January Jenas' 'handler' at Ambition, Jamie Hart, had left to join Proactive. Days later, Jenas - Matusiewicz's star client - followed Hart to the bigger agency. And just a few days after that, he was transferred to St James' Park.

Matusiewicz missed out on up to £250,000, the biggest commission of his career. He was pleased to see his ex-client moving to such a big team, but could not help wondering if family connections had played a part in Jenas's switches to Proactive and then to Newcastle United.

Jamie Hart, after all, is the son of Paul Hart, who just happens to be the Forest manager. And a colleague of his at Proactive is Kenneth Shepherd - son of Freddie Shepherd, Newcastle's chairman.

Proactive's founder and chief executive, Paul Stretford, one of the most powerful and successful football agents in the country, is lucky to have two such well-connected football insiders helping to develop his stable of high-earning players.

There is increasing concern in football that such close relationships could lead to conflicts of interest. The Football Association is rewriting its agents' rules to try to ensure kinship cannot provide an unfair advantage.

Stretford, whose company now represents nearly 300 European footballers and enjoys an annual turnover of about £8m, is unapologetic about cultivating personal ties. Last week, he cheerfully declared that 'nepotism is not a crime', adding: 'There's a potential conflict of interest on lots of occasions but it depends on how that is managed and conducted. And so long as it's conducted professionally then I really don't see what the problem is.'

A glance over Proactive's shareholder register reads like a Who's Who of the footballing fraternity. Players, former players, club directors and even a prominent sports lawyer hold stakes in Stretford's company.

But the share register reveals something else. The sons of managers are not the only ones who have a personal financial interest in seeing certain transfers go through. Sometimes, managers themselves do too - because they part-own the football agencies.

Take, once again, the Jenas transfer. According to the share register, Newcastle's manager Bobby Robson owned 100,000 shares in Proactive when the deal was struck. And in the days leading up to Jenas' well-publicised arrival at St James' Park, those shares rose in value.

The ace midfielder's signing, in other words, was not only a boon for Robson the manager; it was also good news for Robson the financial investor.

There is nothing illegal in this, and there is no suggestion that Robson is swayed by anything other than footballing concerns when he picks his transfer targets. Nor does any suggestion of impropriety attach to Robson's decision to acquire Robbie Elliott, another Proactive player, for Newcastle last July. On that occasion, Elliott was out of contract and the club did not have to pay a transfer fee to get him.

It would, however, have agreed generous salary terms with Elliott, and Proactive, as the player's representative, received a fee from the deal.

It is thought that Newcastle United, which itself owns a small stake in Proactive, has long known about Robson's holding, and sanctioned it. A spokesman for the club said that neither he nor Shepherd could be contacted for comment, because both were in China, promoting the club's profile in the lucrative merchandising markets of the Far East. With them, by coincidence, is Stretford, who is advising on the venture.

Other leading managers have also invested in Proactive. Kevin Keegan, another former England coach and now manager of newly-promoted Manchester City, bought shares in Stretford's company, as did Graeme Souness (Blackburn Rovers) and Peter Reid (Sunderland).

All became shareholders around the time of Proactive's flotation in May 2001. All, too, have since done business with Stretford's company, buying or selling Proactive players for their clubs.

Once again, there is no suggestion that Proactive or any of these managers has acted improperly. Nor has any manager made a profit from investing in Proactive, which has yet to pay a shareholders' dividend.

They all bought their shares in May 2001, when the price fluctuated between 25p and 40.5p. The shares have since slumped, and are currently languishing at 14p.

Some fear a less scrupulous manager than those mentioned above could be tempted to put his own investments first when choosing how to spend his club's transfer millions.

Stuart Bell, director of Pensions Investment Research Consultants, which advises companies on corporate governance issues, said: 'A manager with a shareholding in a football agency faces a potential conflict of interest, unless he is completely open with his club about his holding.'

A Proactive spokesman said: 'I can see the argument. But at Proactive the managers' investments are quite tiny relative to their overall wealth. And any manager who chose players for the wrong reason would be risking his job. If you're not successful as a manager, you get fired.

'Paul Stretford takes it as a compliment that so many managers have chosen to invest in Proactive. They've all invested in their own names and, as far as we're aware, they've all notified their clubs of their investments.'

The Premiership boss who has invested most in Proactive is Graeme Souness, who bought 400,000 shares a year ago, a holding worth £56,000 today.

In December, Blackburn bought the striker Andy Cole, a Proactive player, from Manchester United for £7.5m. It was the club's biggest-ever transfer, and the biggest deal in which Stretford's company was involved last season.

Blackburn said it had been informed of Souness's Proactive investment and added: 'Graeme has a minor equity stake in this company. But we are satisfied that there was no conflict of interest in our signing of Andy Cole.'

Keegan owns 200,000 shares in Proactive, worth £28,000 at current prices. Two of his most high-profile recent signings - Peter Schmeichel, the former Manchester United and Aston Villa goalkeeper, and England veteran Stuart Pearce - are Proactive clients. Both arrived at Maine Road on free transfers, but the agency received negotiation fees.

Chris Bird, a Manchester City director, declined to comment on Keegan's shareholding. He also refused to put questions from The Observer to Keegan, who is on holiday.

Sunderland's boss Peter Reid sold his Proactive shareholding at a loss last week, after being questioned.

Reid, who bought 125,000 Proactive shares when the company floated, acquired Claudio Reyna, a Proactive player, from Rangers last December in a deal worth a reported £4m.

He said in a statement: 'I do not believe that such a small holding, valued at £31,250 out of a total share value of more than £25m at the time, could be regarded as significant and at no time did this ever affect or influence any of my decisions as manager of Sunderland AFC.

'My financial adviser purchased the shares at the time of the public flotation. The acquisition was made in my own name, so there can be no suggestion that this was concealed or of a lack of transparency, as my holding was listed in the company's share register, which is in the public domain.'

Others may follow Reid's example and dispose of their shares in football agencies. But in the enclosed world of English football, the ties that bind managers and agents look certain to remain strong. Discussions about whether that is good for the game are sure to follow.

Proactive's Premiership shareholders

Kevin Keegan

Bought 200,000 Proactive shares last May. Has since brought Stuart Pearce and Peter Schmeichel, both Proactive players, to Manchester City.

Peter Reid

Spent £31,000 on Proactive shares at flotation, then bought US captain and Proactive client Claudio Reyna to Sunderland. Sold his stake last week.

Bobby Robson

Newcastle United boss bought Proactive client Jermaine Jenas after taking a stake in Stretford's agency. He is with Stretford this weekend, promoting his club in China.

Graeme Souness

The value of his Proactive stake has slumped to £56,000. Brought Andy Cole, a Stretford client, to Blackburn Rovers for £7.5m - the club's record signing.

Conal Walsh and Denis Campbell