The England and Wales Cricket Board (ECB) and the country's Professional Cricketers' Association (PCA) have become increasingly concerned with the rise in the numbers of non-England qualified players signed by counties.
This season just over 70 players will feature in County cricket either as fully-fledged overseas signings or as cricketers signed under the Kolpak agreement.
This allows players from countries who have trade agreements with Europe to play in England without being regarded as foreign recruits.
There are fears that allowing the present trend to remain unchecked could have dire implications for English cricket with proceeds from international matches effectively funding the first-class game.
At present each County received some 1.3 million pounds per year from the ECB, with four percent of that figure awarded in bonuses depending upon how many players they can provide for the England team.
But under the new scheme, which the ECB hope to have fully operational by 2007, that percentage reward for picking English qualified players would rise to 25 percent.
Counties will also receive a reward for every day's cricket played by each English-qualified player.
The ECB hopes this will enable them to eventually produce over 30 homegrown players who can average over 45 in first class cricket and 25 who claim over 40 first class wickets per season.
In another development, Counties who produce players for the England team won't just have the player's County salary covered, but will also be given a bonus payment.
And clubs will be given bonuses for increasing crowds by 15 percent.
The plan also envisages a revamping of England's home international programme.
This season a player involved in both the Test and One-day sides, such as captain Michael Vaughan or opening batsman Marcus Trescothick, could be involved in 45 days of international cricket.
The triangular One-day series, which this year features Australia and Bangladesh, will be scrapped.
Instead, England plan to play a two or three Test series at the start of the summer followed by a One-day series of up to five matches.
They will then face a four or five Test series later in the summer, which will finish with another One-day series of up to five matches.