The future of the second-tier Championship has been thrown into doubt after the Rugby Football Union (RFU) slashed funding to its clubs.
Money has been cut from about £534,000 to a 2015-level £238,000 per club.
The RFU say that targets that were given to the league have not been met.
“The decision in 2015 to significantly raise Championship funding was against a set of objectives and deliverables that we do not believe have been achieved,” said RFU boss Bill Sweeney.
“This is a decision based on a principle of ensuring levels of investment are geared to a clear return on investment.
“There are many worthy requirements from both the professional and community game and we need to make sure that every pound spent is clearly justified.”
The decision to cut funding comes after reigning Premiership champions Saracens were relegated to the Championship following persistent salary cap breaches.
The move will lead to fears that the RFU and Premiership Rugby are taking a major step towards the “ring-fencing” of the top flight.
However, the RFU insist aspirational Championship clubs will still be able to fulfil their ambitions, regardless of this drastic cut in central revenue.
“Ultimately the difference in the levels of funding between the current agreement and our new commitment will not be the deciding factor for clubs with aspirations for promotion and will always require additional investment,” Sweeney added.
“The gateway is still open for clubs to get into the Premiership if they have the necessary financial resources and meet the minimum standards required.”
Furthermore, although a number of Premiership players have been developed in the Championship, Sweeney says the numbers are not substantial enough.
“The Championship is, and will continue to be, a useful way for players to get additional developmental experience, but we do not believe it is the primary place where Premiership and England players are discovered and developed.”
Meanwhile, London Scottish chairman Malcolm Offord said the club were “disappointed” at the RFU’s decision which will lead to “fundamental changes” to the league.
“The chairman, president and management at London Scottish will be in immediate consultation with all stakeholders to achieve the most positive outcome for the players and staff at the club,” a London Scottish statement said.