MELBOURNE: Football Federation Australia's embattled chairman Steven Lowy believes a FIFA takeover of Australian soccer would be a "reputational" black eye for the sport but hopes to work with the global governing body to resolve a festering power struggle.

Lowy suffered a huge blow to his credibility on Thursday when he failed to get the numbers to pass key governance reforms by a FIFA-imposed deadline.

FIFA has demanded the FFA make its Congress, which votes for members of the board, more democratic but Lowy's proposed model was rejected by club owners and two powerful states at an annual general meeting.

That has paved the way for FIFA to install a "normalisation committee" which would mean sacking the FFA board and taking control of the game in Australia until a new administration can be formed.

FIFA is not expected to act until after a members committee meeting next week, and Lowy said he was hopeful of resolving the crisis to avert a takeover.

"We believe we will be able to work with FIFA on sorting this out going forward," he told local broadcaster Fox Sports.

"Of course I'd be incredibly sad (if there was a takeover)... it would be a very sad day if FIFA or anyone else comes in, removed the board and basically removes the independence of the game.

"I think our game would suffer deeply. It would suffer reputationally with government, with corporate sponsors and with fans."

Although under pressure from club owners to stand down, Lowy, the son of former chairman and shopping centre tycoon Frank Lowy, has said he will stay in the role.

The Lowy family has dominated Australian soccer since the game was re-booted following the collapse of the top-flight National Soccer League in 2003 amid allegations of fraud and mismanagement.

Australia have qualified for four successive World Cups and won their maiden Asian Cup title in 2015 under the Lowys' stewardship but the A-League remains a bit player in a crowded sports market dominated by rugby league and Australian Rules football.

That has not prevented A-League club owners from demanding a bigger share of FFA disbursements and more seats on the powerful Congress.

Unlike his more popular father who he succeeded two years ago, Lowy has struggled to hold together the uneasy coalition of clubs and state members, and his board has been accused of being aloof and allowing the A-League to stagnate in recent years.

"His and his organisation's tin ear, their refusal to accept that it needed to change, the insistence that Lowy and his cadre of colleagues were the only ones who knew how to run Australian soccer has plunged the sport into disarray," prominent soccer writer Michael Lynch wrote in Fairfax Media on Friday.