Luis Suárez faces a racism charge that threatens huge ramifications for the Liverpool striker and his club after the Football Association announced he had a case to answer over Patrice Evra's allegations he suffered sustained racist abuse during Manchester United's recent visit to Anfield.

A month after the investigation began, the FA has ruled it has enough evidence to charge Suárez with an offence that, if proven, will lead to a substantial ban. A precedent was set in 2003 when John Mackie of Reading was banned for eight matches, five of which were suspended, after making racist remarks to the Sheffield United striker Carl Asaba. However, Mackie admitted that charge whereas Suárez is denying his, meaning he would almost certainly face tougher sanctions if he were found guilty.

Liverpool responded immediately by announcing that Suárez would plead not guilty, adding that they "remain fully supportive of Luis" in a dispute that threatens to have serious repercussions for the club's relationship with United.

Evra had complained after the match that he was abused "at least 10 times" and his statement to the FA accuses Suárez of using a Spanish variation of the N-word. Suárez has categorically denied the allegations, saying the words he allegedly used were not offensive or racist, but the FA investigators disagree, charging the Uruguay international with "abusive and/or insulting words and/or behaviour contrary to FA rules", including "a reference to the ethnic origin and/or colour and/or race of Patrice Evra".

Within minutes Liverpool had released their own statement to make it clear that Suárez would continue to maintain his innocence. "The club this afternoon received notification from the Football Association of their decision to charge Luis Suárez and will take time to review properly the documentation which has been sent to us.

"We will discuss the matter fully with him when he returns from international duty, but he will plead not guilty to the charge and we expect him to request a personal hearing.

"Luis remains determined to clear his name of the allegation made against him by Patrice Evra. The club remain fully supportive of Luis in this matter."

The crux of the case appears to depend on whether the FA can prove there was racial intent behind Suárez's words but it is a complex issue given that in Uruguay it is common practice for people to use derivatives of "negro" in a non-offensive way. "Negrito", for example, is a word that is often used without being deemed as racist.

However, the fact Suárez and the France international Evra were arguing at the time counts against the Liverpool player and the FA is clearly not satisfied with his first public words on the matter, when he talked last week of it merely being a "way of expressing myself. I called him something his team-mates at Manchester call him, and even they were surprised by his reaction."

What can be said with certainty is that it represents a major embarrassment for the FA and the Premier League that one of their high-profile players is charged with racism while John Terry, the England captain, is at the centre of a parallel investigation into allegations he racially abused Anton Ferdinand of Queens Park Rangers, eight days after the Suárez-Evra incident.

Liverpool would be compelled to take their own action against Suárez if he were found guilty and their manager, Kenny Dalglish, faces personal embarrassment after steadfastly defending the player over recent weeks, insisting there was no case to answer.

The Anfield club face the possibility that a long, drawn-out dispute could disrupt their season. Suárez has been their best player this season, underlying his ability by scoring all of Uruguay's goals in a 4-0 defeat of Chile on Saturday.

Evra told French television directly after the match that Suárez had been trying "to wind me up" and that "there are cameras, you can see him say a certain word to me at least 10 times. There is no place for that in 2011." His manager, Sir Alex Ferguson, who accompanied Evra when he made his complaint to the referee Andre , has submitted a statement as part of the FA investigation.

The FA is acutely aware of the sensitivities between the two clubs and asked them both at the outset not to risk inflaming the situation by discussing it in the media. Privately, United are angry that Suárez and Dalglish have ignored these instructions. The Old Trafford club say they will not make any comment "in accordance with guidance from the authorities".