Last updated on .From the section Rugby Union

London Welsh are fifth in the Championship table after 11 games

Championship club London Welsh are set to go into liquidation because of an "unsustainable" financial situation.

London Welsh now hope to reform as a semi-professional side in 2017, playing at their current Old Deer Park ground.

The club can continue to play during the liquidation process, but they will be deducted 20 points.

They are due to face Doncaster in the British and Irish Cup on Saturday, but it is not yet known if the fixture will go ahead.

A Rugby Football Union spokesperson said: "The RFU are working with the club to find a way to fulfil their fixtures this season."

London Welsh will have to put together a sustainable business plan to the RFU - and raise a bond of £300,000 - in order to exist as a phoenix company.

If this is approved by the RFU then they will be able to keep their place in the Championship, or National League 1 if they are relegated.

If the plan isn't approved and they can't raise the bond, then they will drop out of the leagues altogether.

Crowds 'as low as 400'

The club had a winding-up petition dismissed in September after agreeing a takeover with a United States-based investment group, but the deal was never completed.

Founded in 1885, the club still holds the record for the most players selected in a British and Irish Lions squad, when seven were picked for the 1971 tour to New Zealand.

The Exiles were in the Premiership as recently as the 2014-15 season, when they were based at the Kassam Stadium in Oxford - but were relegated after losing all 22 matches.

"Due to a playing budget of £1.7m and gates at games numbering as low 400, the club's current business model is totally unsustainable," chairman Gareth Hawkins said.

"Having to break the news to 40 staff members yesterday was extremely difficult.

"In the New Year, it is the hope and intention of the board that London Welsh will be able to return to playing at Old Deer Park.

"However, it will first be necessary to change the club's business model to a semi-professional set-up and form a new company, and then raise £300,000 so that the club can regain a position within the Championship."

Analysis

Chris Jones, BBC Radio 5 live rugby union reporter

This is a sad day for one of Britain's oldest and most famous rugby clubs, but a salutary lesson of the harsh financial realities of professional rugby.

In hindsight, London Welsh should never have chased the Premiership dream without the backing, management or the infrastructure to be sustainable.

Premiership clubs are able to lean heavily on central revenues - especially from television - but this is not the case in the Championship, and unless clubs in the second tier have a wealthy backer they simply cannot support a professional set-up.