• RFU accused of giving Premiership ‘ring-fencing on a plate’ • Swingeing cuts of more than £3m come into force next season

The Rugby Football Union is to cut its funding of the Championship by 50%, throwing England’s second tier into turmoil and handing “ring-fencing to the Premiership on a plate”.

It is understood the RFU’s swingeing cuts of more than £3m will come into force next season, leaving a number of Championship clubs in a state of shock and uncertain of their futures. One club owner described the move as “showing contempt” for the Championship, suggesting the league could be reduced to amateur status in “two or three years”.

The move has been described as Premiership ring-fencing “by default”, with Saracens set to be relegated into a league beset by financial strife next season. “The RFU has handed ring-fencing to the Premiership on a plate and they’ve paid nothing for it,” added a Championship source. “They’ve just given it away.”

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The 12 clubs were informed of the measures at a committee meeting on Tuesday. They receive around £550,000 in funding but halving that at such short notice will be “catastrophic”, according to one source, with another suggesting it could leave 200 players without clubs.

Premiership Rugby Limited, which contributes to Championship funding, has been seeking to pull up the drawbridge but failed in its attempts to implement an end to relegation for the start of this season. The tier-two clubs will now have to operate on significantly lower budgets and, with a host of players on long-term contracts, some clubs face considerable upheaval to stay afloat let alone push for promotion.

“It’s the RFU saying it doesn’t want the Championship,” the Nottingham chairman, Alistair Bow, said. “The Premiership has had a lot of influence over all the decisions regarding the Championship, certainly for the 10 years I’ve been involved. I do strongly believe the actions the RFU has taken have handed PRL everything on a plate and without having to pay a penny for it. The RFU has handed English professional rugby … everything, to the hands of PRL.”

The RFU announced a return to profit in December but more losses were forecast for the coming year. The latest annual report highlighted a 7% reduction in investment in the professional game and a 6% drop at community level. The accounts also showed a drop of £7m in investment to £100.5m, and that figure was forecast to fall to £95m in the next year.

“It’s not a money-saving exercise, it’s more to do with value for money,” Bow said. “Either the RFU has been very badly informed, or misinformed. I don’t think they know what the cuts will do for a club like Nottingham. It’s nothing more than contempt for what we’re trying to do for the sport as a whole. I just wonder if these people at the RFU who make these decisions have ever run a proper business.”

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PRL has long been trumpeting its A League as an alternative second tier for English rugby and, emboldened by its cash injection of more than £200m, appears to have got its way. One source suggested the Championship had “fallen victim to the cartel that is PRL”, while another said there has been a lack of explanation from the RFU for the cuts.

“The bit that’s frustrating is what is the rationale behind the savage cut in funding? Are they rugby reasons or is it purely financial,” a Championship director of rugby said. “It’s a massive backwards step.

“The RFU obviously don’t see us as part of the pathway programme which is a bit sad really given what the Championship has done for the Premiership and England over the years. What about the coaching pathway, where are they going to cut their teeth, what about the refereeing pathway? Five or six years ago they were saying we had to all be fully professional. Now, suddenly, they say you have to be firmly part-time.”