Schalke and Werder Bremen are to allow their Brazilian players to compete at the Olympics after all, despite winning their case before the Court of Arbitration for Sport earlier on Wednesday.

The u-turn comes after the clubs spent weeks battling FIFA's position that it was "mandatory" for clubs to release players aged 23 and under for the tournament, which begins in Beijing on Thursday.

Schalke defender Rafinha and Werder Bremen playmaker Diego are included in the Brazil squad.

Although CAS found against FIFA, ruling that clubs could not be forced to release players because the Olympics do not appear on the official FIFA calendar, the clubs consulted each other on Wednesday afternoon before issuing almost identical statements.

"We will release Rafinha to play at the Olympic Games if the Brazilian Football Association quickly create the conditions for his involvement", said Schalke club general manager Andreas Muller, with Werder's Klaus Allofs echoing those statements in regard to Diego.

Those conditions include the provision of adequate insurance against injury, and the clubs have already contacted the Brazilian Football Confederation (CBF) to finalise the terms of a deal.

"This decision is in line with FIFA's appeal to allow the player to take part in the Olympics," Muller added. "We now expect the world governing body to support us in our talks with the CBF, particularly as what we are demanding is precisely what FIFA wishes to set down in its regulations in this matter."

Both clubs begin their seasons on Saturday in the opening round of the DFB-Pokal, with Schalke away to Homburg Saar and Werder Bremen travelling to Eintracht Nordhorn. Schalke also face a Champions League qualifier against Atletico Madrid next week.

With only a few days left before their competitive fixtures begin, both clubs said it was counter-productive to withdraw their players from the Olympics at such short notice.

"Not only do we have to come through the opening fixtures in the Bundesliga, we also have an extremely tough draw in the Champions League qualifying round in the shape of Atletico Madrid," Muller said.

"We could have done with our strongest squad for these matches. We firmly believe, however, that unfortunately there is absolutely no point in bringing Rafinha back one day before our opening game.

"All the frustration and the huge disappointment he would feel, coupled with the exertions of travelling, would not in our opinion have put him in a position to play to the best of his ability."

The clubs accused FIFA of delaying the case until the last possible moment in order to make it awkward for clubs to withdraw their players.

"Our decision would have been different if the legal position had been clarified earlier," Muller said. "In that case we wouldn't have let Rafinha go under any circumstances.

"FIFA and the CBF were aware of the situation months ago. I believe the matter was deliberately delayed until just before the Olympics to put the clubs in an awkward position."

Barcelona, who appealed to CAS in an attempt to stop Lionel Messi from playing for Argentina, have yet to respond to Wednesday's ruling.

However, earlier on Wednesday, Argentina coach Sergio Batista said he remains convinced that Messi will stay with the squad in Beijing.

"We're taking the situation calmly because Lionel, at the moment, is with us," he told La Nacion. "Lionel is going to stay playing with us. Both tomorrow and for the rest of the tournament.

"I'm not going to get involved in legal matters. I don't think Barcelona will call for him asking him to go back. I have every faith in that and also the player's thoughts reflect what we all want.

"We're confident Lionel is going to play the entire tournament with the Argentina side. We spoke to him and he told us that he was going to speak to the Barcelona directors and tell them that he wants to stay in Beijing."

Batista's comments come despite a claim made on Tuesday by Barcelona sporting director Txiki Begiristain that Messi would be recalled if the CAS ruled in Barca's favour.

Earlier, FIFA president Sepp Blatter urged the three clubs to allow their players to remain in Beijing.

"The Olympic football tournaments are a unique opportunity for a player as they are high-level competitions that give everyone involved - most notably young players - the chance to gain international experience that will stand them in good stead for the future," he said in a statement.

"It stands to reason, therefore, that it is not only the player and his national team who can benefit from such an experience, but also his club."

FIFA's statement concluded: "FIFA wishes to thank all those clubs who have released their players for the competition and shown great solidarity and Olympic spirit in doing so."

In their statement, the CAS expressed hope that the decision would not cause major disruption to the tournament.

"In view of FIFA's recommendation made to the clubs to release their players as well as of the Olympic spirit, the CAS call upon the good will and good sense of FIFA and the clubs to find a reasonable solution with regard to players who wish to represent their country in the Olympic Games," the statement said.

The format of the Olympic tournament is now expected to be reviewed before the 2012 Olympics in London.

FIFA plan to meet with the International Olympic Committee after the conclusion of the Beijing Games to clarify the issue for the future.

The tournament in Beijing begins on Thursday, one day before the official opening ceremony of the Games.