LONDON (Reuters) -Everton have had their points deduction for breaching Premier League financial rules reduced to six points from 10 after an appeal, the club said on Monday, though they could yet face another punishment for a separate overspend.

Everton were docked points with immediate effect in November after being found to have breached the league's rules relating to spending and losses, partly blamed on the rising cost of financing their new ground that is under construction.

"An independent Appeal Board has concluded that the sanction for Everton's breach of the Premier League’s Profitability and Sustainability Rules (PSRs), for the period ending Season 2021/22, will be an immediate six-point deduction," the Premier League said in a statement.

The original deduction meant Everton dropped from 14th in the standings into the relegation zone with four points. The club filed an appeal against the initial deduction, which they labelled "wholly disproportionate and unjust".

"Everton can confirm an Appeal Board has concluded that the points deduction be reduced from 10 points to six points, with immediate effect," a club statement said.

The record sanction was appealed on nine grounds, each of which related to the sanction, rather then the breaches and two of those nine grounds were upheld by the Appeal Board.

Everton admitted to a breach of PSR for the period ending with the 2021-22 season, with their total losses for that period amounting to 124.5 million pounds according to an independent commission.

According to the Premier League's regulations, clubs are permitted to lose a maximum of 105 million pounds ($133.33 million) over a three-year period.

The three-person appeal board concluded that the independent commission which imposed the 10-point ban made legal errors on two of them.

It was ruled wrong to punish the club for being "less than frank" over what it told the Premier League about its new stadium debt and also wrong "not to take into account available benchmarks" saying that a six-point sanction was broadly in line with English Football League guidelines.

In dismissing the other grounds for appeal, the panel said that the club's reduction in transfer spending towards the end of the four-year period under investigation showed only "limited evidence of a more sensible approach."

Everton recorded four straight wins after their deduction to climb up to 16th, but have been dragged back into the relegation battle following a run of nine league games without a victory. The reduction means they move up to 15th on 25 points, five above the relegation zone.

Football League founder members Everton, who have spent more years in the top flight than any other club, were charged again by the Premier League in January for a separate PSR breach, along with Nottingham Forest.

Both clubs were referred to the chair of the Judicial Panel, the Premier League said, who will appoint an independent commission to determine the appropriate sanction, which may include a further deduction for the Sean Dyche-managed club before the end of the season.

A second points penalty would increase risk of a first relegation since 1951 and add to the uncertainty over the future of the club, who are currently in the midst of protracted takeover talks with U.S. investment fund 777 Partners and also hoping to move to their new stadium ahead of the 2025-26 season.

Last year, Manchester City were referred to an independent commission over more than 100 alleged breaches of finance rules since the club were acquired by the Abu Dhabi-based City Football Group in 2008.

No verdict has been reached in that case. Premier League CEO Richard Masters said last month that a date had been set for a hearing. City have denied any wrongdoing.

Clubs in England's top flight have been docked points before.

Middlesbrough had three points deducted in 1997 when they failed to fulfil a fixture, while Portsmouth received a nine-point penalty in 2010 when the financially-troubled club entered administration.

($1 = 0.7875 pounds)

(Reporting by Mitch Phillips, Trevor Stynes and Aadi Nair; editing by Christian Radnedge)