There has been a belief that, never mind the entrenched positions taken by various parties, there will be a settlement by the end of the season that will ensure a six-country European club tournament for the next eight years.

After all, candles have burned down to the end before, not least before the current accord was signed, on the day of the Heineken Cup final; brinkmanship has yielded reward. It may do again and this week the Rugby Football Union chief executive, Ian Ritchie, who has spent the season trying to broker a deal only to find his goalposts not so much moved as stolen, said it was imperative that everyone involved realised what they stood to lose.

A danger in the current disagreement is that a number of avenues that lead to a resolution have been blocked off. The English clubs will not have anything to do with the Heineken Cup organisers, European Rugby Cup Ltd, but are prepared for the competition to be run by the Six Nations committee.

That is not acceptable to the French rugby federation, which is campaigning for the way the game in Europe is run to be shaken up, proposing a Uefa-style organisation is formed, responsible not just for overseeing a major tournament but embracing all the smaller unions, and based in Geneva.

It is why it wants next season to be a transitional one in Europe with ERC continuing to run the Heineken Cup for another year while the new company is set up, a wildly optimistic timescale given the reluctance of the Celtic nations to concede power to clubs to run the commercial side of a cross-border tournament. The FFR's plan would widen the franchise and provide a pathway for countries like Georgia and Russia.

The Welsh regions are not prepared to play in a transitional Heineken Cup because it would mean a drop in income. Under the plan agreed by the RaboDirect Pro12 unions and the FFR at a meeting in Dublin last month that the RFU was excluded from, 20 teams will take part in the tournament next season when the Amlin Challenge Cup will be suspended.

The Rabo would provide 12 of the teams, France six and the other two would be filled by sides from, probably, Spain and Portugal. It is estimated that a full-blown Heineken Cup next season would have been worth €60m but without the English and more than half the French clubs, that figure will drop to €40m.

Even though France would provide less than a third of the sides, they will receive 50% of the pot, leaving the four Pro12 nations to divide the rest equally. The regions, who wanted to take part in the aborted Rugby Champions Cup proposed by the French and English clubs, were committed to the tournament by their union but are unwilling to take part because their income would drop and they would have to sell fixtures of little value.

They wanted the Welsh Rugby Union to fight for the Pro12 pot to be divided 12 ways, according to the number of teams, but they feel that their union wants to take control of the regional game and cut the number of professional sides to three, meaning that an equal four-way split suits them. And they cannot understand why the French get half for supplying six unnamed clubs.

The regions wrote to the WRU last week saying that the proposal for the Heineken Cup next season meant they would not be in a position to agree a new participation agreement for the next four seasons. They have until the end of the month to say yes or no knowing that it is not so much an accord they would be signing as a suicide note with the deal worth the same, before inflation, as it was in 2009.

Both the regions and the WRU are looking at options should the agreement not be signed. The former are talking with Premiership Rugby about an Anglo-Welsh league while the union is considering setting up two professional teams in South Wales, in Neath and Pontypridd, and another in the north, with players on central contracts, but if the regions remained trading the governing body would struggle for players and next season's Heineken Cup would be even less prestigious.

The Anglo-Welsh plan involves a five-year agreement and a 16-team league. The regions are prepared to go to court to win the right to play in a cross-border tournament without the consent of their union, but they will also take out an injunction against the WRU if it next month tries to set up new teams and centrally contract players. If successful, they would almost certainly have to put Anglo-Welsh plans on hold until the outcome of a hearing.

A five-year Anglo-Welsh league, broadcast by BT Sport, would mean no way back for the Welsh and English clubs into the Heineken Cup as it is currently run. They envisage two smaller tournaments of 20 teams each, divided into four pools with sides playing each other once before the semi-finals and final.

That would leave Ireland, Scotland and Italy in a perilous position, with the Pro12 stripped of the Welsh and the number of European weekends cut by three. They would struggle to hold on to their leading players and there would be a potential knock-on effect in the Six Nations championship.

There are still logistical hurdles to be cleared before an Anglo-Welsh league is a viable option, not least the issues of promotion and relegation and funding. The regions want a moratorium on relegation while they replenish their stocks and they accept they would initially receive less income than the English, who currently receive more than £2.7m each for taking part in the Premiership, more than double what the regions get for being in the Pro12.

The league is at this stage more of a threat than reality, a way of jolting the Pro 12 unions and getting them to negotiate about a six-country European club tournament again, but so much time has been wasted there is little left. And, never mind the season, there is no goodwill. Attitudes have hardened and there is no mood for compromise despite what everyone stands to lose, a bitter Heineken brew.

This is an extract taken from The Breakdown, the Guardian's weekly rugby union email. To sign up, click here