Chelsea defender Terry learned today that his court case will begin on July 9, eight days after the final of the tournament in Poland and Ukraine.
Terry, who has vowed to clear his name, has in fact skippered the Three Lions since the altercation with QPR defender Anton Ferdinand at Loftus Road on October 23 last year, featuring in the 1-0 win over Sweden in November.
But crucially, the 31-year-old had not been charged by the Crown Prosecution Service at that stage.
Capello and the FA have always maintained that Terry is innocent until proven guilty and have selected Steven Gerrard as captain when facing an assault charge in the past.
But the greater fear that Terry's case could overshadow the Euro 2012 campaign could force a change of stance.
The Italian is already having to cope with striker Wayne Rooney's absence from the first two games as he serves a suspension for his red card in England's final qualifier in Montenegro.
England are not due to play again until February 29 when they take on Holland in a friendly at Wembley.
Terry, who faces a maximum fine of £2,500 if convicted, has repeatedly denied making the alleged slur.
The footballer's solicitors, Grosvenor Law, said in a statement after the hearing: "Now that the court has fixed a date for trial, Mr Terry looks forward to the opportunity to clear his name.
"Mr Terry has consistently and resolutely maintained that his well-publicised remarks were made in the belief that he was being accused of racist abuse by Mr Ferdinand.
"Mr Terry was shocked and disgusted by that accusation at the time. Mr Terry denies making any racist statement, and will establish in court that he is not guilty of such offence.
"Mr Terry has never racially abused another player in his entire career."
Big call: John Terry could be stripped of England armband
John Terry is expected to be stripped of the England captaincy for a second time after the 14-strong FA board held emergency talks on Thursday.
Although Terry is believed to retain the support of Fabio Capello - who will be free to name the centre half in his Euro 2012 squad - the captaincy decision is set to be taken out of the manager's hands.
Capello is abroad and the FA could move on Friday to end the frenzied speculation over Terry's England role, with the player's trial for allegedly racially abusing Anton Ferdinand adjourned this week until July 9 - eight days after the Euro 2012 final.
Terry, who returns to Chelsea training on Friday, is struggling to be fit for Sunday's Barclays Premier League match against Manchester United after missing the 1-1 draw at Swansea. He has a knee injury that requires further rest.
In the meantime the debate about his future rages on, with FA chairman David Bernstein taking soundings from his board and pressure mounting to act quickly. Last night there was growing support among FA directors for the compromise solution of Terry remaining in the team but no longer wearing the armband.
Court case: Terry and QPR defender Anton Ferdinand
Some on the board are adamant the FA, with their strong anti-racism agenda, cannot go into a major tournament led by a player facing trial for racist behaviour, even if Terry has denied the charge.
Bernstein was at the Premier League chairmen's meeting in London yesterday with FA general secretary Alex Horne. They discussed the issue with the Premier League trio on the FA board, Sir Dave Richards, David Gill and Phil Gartside. Talks have also taken place with the national game representatives and the two new directors, Heather Rabbatts and Roger Devlin.
Capello has been the staunchest supporter of Terry, restoring him to the captaincy last year after he lost the role early in 2010 over an alleged affair with the former girlfriend of England team-mate Wayne Bridge.
Support: England boss Fabio Capello had backed Terry
The FA had wanted to let the legal process take its course in the hope it would be completed long before England's first Euro 2012 match, against France in Ukraine on June 11, so allowing them to leave all team decisions to Capello.
But the postponement of the trial, because of witness availability, has scuppered such hopes. FA board members are nervous. They fear that suspending Terry from international football, and so forcing him to miss Euro 2012, would set a dangerous precedent.
The FA came under more pressure to act on Thursday with Ferdinand's brother, Rio, appearing to be express his views on the situation in a cryptic tweet. He wrote: 'Morning world!! I feel insulted....woke up with a bad taste in my mouth ....its a god damn joke!'
Family matters: Anton's brother Rio Ferdinand piled pressure on the FA
Arsenal's Emmanuel Frimpong, at Wolves on loan, tweeted: 'Wanna no if Anton Ferdinand was in the England team and was being charged for racism would the FA wait till the summer to charge? outoforder.'
QPR manager Mark Hughes spoke of his anger at losing Anton during pre-season due to the July 9 court date.
He said: 'It's bang in the middle of pre-season when ideally I would want my player available.
'It has been dragging on for ever. I would have preferred it to be done and dusted by now. I think everybody would.'
The Chelsea defender will NOT lead the Three Lions at this summer's Euro 2012 tournament in Poland and Ukraine.
Terry was informed of the decision in phone call at 10am today from FA chairman David Bernstein.
An FA statement said: "Following the decision to adjourn the court case against John Terry to July, we can confirm he will not captain the England team until the allegations against him are resolved.
"The FA board expected the trial to be concluded prior to the European Championship.
"Further to Wednesday's confirmation that the trial will not take place until after the tournament, the board has discussed the matter in detail and has collectively decided it is in the interests of all parties that John has the responsibilities of captaincy removed at this time.
"This decision has been taken due to the higher profile nature of the England captaincy, on and off the pitch, and the additional demands and requirements expected of the captain leading into and during a tournament.
"The FA board can confirm that he has not been excluded from the squad and that Fabio Capello is free to select him for the Holland fixture on February 29 and the European Championship.
"FA Chairman David Bernstein has spoken to both John Terry and Fabio Capello to explain the facts to them.
"Fabio Capello has not been involved in The FA board discussions which reached this conclusion but understands that The FA board has authority to make this decision.
like i said alot of time b4.... he should never be the captain in the first place.........
Stevie G
I hope they give it to Scott Parker cos he deserve it more than Gerrard.
Gerrard doesn't alway perform when he plays for England and he is also injury prone nowadays.
Give it to any deserving man in the England team except Terry....The man should be thrown out of the team cos he does not have a conscience or ethics at all.Remember the Wayne Bridge saga and this race issue.
Capello made a mistake in appointing him as captain the second time. this guy is a timebomb and capello never seemed to learn his lesson well.
wayne rooney the captian!
give it to wayne rooney
I am a Man United fan.But I don't mind if they give it to Stevie G.