The NRL has stripped the Melbourne Storm of their 2007 and 2009 championship titles after the club were found guilty of systematic salary cap cheating totalling A$1.7m (£1.02m) over the past five years. The governing body also took away three minor titles from 2006-08 and ruled the club will accumulate no competition points for the entire 2010 season. The club have been fined A$1.6m and returned their prize money.

David Gallop, the NRL's chief executive, said: "It was through this system that they were able to attract and retain some of the biggest names in rugby league. In doing so they have let down the game, the players and the fans of the Melbourne Storm. Clearly there were some individuals who knew what was going on and perhaps many who did not.

"By nature, that means innocent parties will suffer as a result of this punishment but the persons responsible are those who constructed the scheme and anyone who knowingly signed a false statutory declaration to deceive the game. It would be unfair now on the players and fans of every other club in the competition to allow the Storm to enter this year's finals series or to retain the titles they won.

"As a game we will do all we can to restore the faith of each of those parties but there is no alternative now but to deal with the situation that has been so deliberately engineered. As was the case with Canterbury after 2002, the only other instance in which we have seen such an elaborate and contrived set of accounts, there is the chance for the club to begin a rebuilding process with the fans and the game by the way it conducts itself in the weeks and months ahead.

"A significant step in that process has been the way the Melbourne board has reacted to the information the salary cap team tabled this week. Rather than look to conceal the activities, the board has co-operated fully and we have been informed that the club's owners, News Limited, have now ordered a full forensic examination of all club accounts."

The Storm coach, Craig Bellamy, admitted news of the deception had come as a shock to him and his players. He said: "This is an absolute shock to myself, to our football staff, to our players. Personally I am heartbroken. But this football club has great character and values. We will not walk away from this challenge. We will stick tight together as a group and fight our way back from this."

The News Limited chairman and chief executive John Hartigan joined the condemnation. He said: "Today is a regrettable day in the history of the game. I don't think there will be a league fan anywhere who is not outraged by what appears to be a highly organised, deeply deceptive fraud in which there was systematic and deliberate concealment of unlawful payments to certain players over an extended period."