Just two days away from the biggest event on its calendar, the largest Returned Services League (RSL) branch in the country has declared war on RSL clubs, calling for an end to their 60-year relationship.

The president of the New South Wales RSL branch Don Rowe has accused the iconic clubs of damaging the RSL brand.

Mr Rowe says it is a split that has been decades in the making.

He says the cosy relationship between clubs and branches first started to come unstuck in the early 70s when RSL clubs started opening their doors to the general public.

"A lot of the clubs have gone completely away from the ideals and the aims of what they were founded for 50 or 60 years ago by the RSL branches," Mr Rowe said.

"Clubs have now become big business and that's what they are concentrating on.

"They don't really care if there is Anzac commemoration at the local memorial or not."

RSL clubs were first created by RSL branches in the 1950s to offer cheap beer and entertainment for more than a million returned servicemen.

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However, Mr Rowe says since then most RSL clubs had strayed so far from their original ideals they were little more than gambling palaces.

He says while the public still see RSL clubs as the custodians of the eternal flame, RSL branch members now make up less than 5 per cent of the RSL clubs' membership.

"I've got to be quite honest. Some clubs are quite good to us but there are also clubs where they don't have anything to do with the sub-branch," he said.

"So in those sort of cases we certainly have been well and truly divorced."

With 274 RSL clubs across the state, NSW is home to some 80 per cent of RSL clubs in the country.

While many people assume RSL clubs have been the cash cows for the RSL movement, Mr Rowe says most RSL branches rely - almost entirely - on annual badge sales and a small army of elderly volunteers.

"The RSL now receive no income from clubs and unfortunately they've still got the name of our organisation," he said.

"As a matter of fact they've tarnished our name, regrettably... and in some cases they've trashed the brand."

Mr Rowe says RSL branches are a welfare organisation for ex-servicemen - run separately from the clubs - but most people think that RSL clubs and branches are one and the same.

He says this misconception is so damaging to the brand that the RSL is contemplating a name change.

"The general perception of the public out there is that our organisation, the RSL, was just old guys sitting around a pub drinking beer and playing pokies," he said.

"It's up to us to look at how we can become relevant to the community once again - particularly the younger veterans - and if we need to go down the track to looking at changing our name then I think we have to do it."

'Inextricably linked'

The call for a split appears to have caught RSL clubs completely off-guard.

NSW Clubs declined to comment, but RSL and Services Clubs Association chief executive Graeme Carroll says it is hard to see how a split could work.

"I'd strongly dispute the fact that they don't support the Anzac traditions and the veterans at the local club," he said.

"While they might advocate a split, the fact remains the clubs and the risk are inextricably linked."

Mr Carroll says it is up to the RSL branches if they feel the need to rebrand themselves, but severing all ties from the clubs is a step too far.

"We certainly don't see that the point has been reached at all," he said.

"There is plenty of room for us to sit down and work through these issues together."

Club rooms of the North Sydney sub-branch in Cammeray in the late 1940s. ( Supplied )

A recent spate of multi-million-dollar court actions launched by RSL clubs against their local RSL branches has laid bare just how toxic the relationship has become between the clubs and branches.

Mr Rowe says while many clubs still paid peppercorn rents for the RSL's multi-million dollar properties - in return most clubs offered RSL branches little more than an office in the basement and a discount on the band for Anzac Day.

He said those same clubs had now turned on them, forcing the RSL to spend millions of dollars - which should be used to help veterans - defending itself in court.

Mr Rowe says it was the latest court action involving the Malabar RSL Club in Sydney's eastern suburbs that proved the final straw.

The club sued the local RSL branch, claiming that the more than $7 million it had spent on club facilities in the past four decades entitled the club to continue to rent the premises for as long as it wanted.

The action in the NSW Supreme Court collapsed spectacularly last Friday.

After a week of hearings, the club's lawyers were forced to admit they simply did not have a case.