London Scottish have insisted there is no problem with their financial model despite seeing the Scottish Rugby Union pull out of a tie-up arrangement after just four months.
Murrayfield chiefs set up the partnership with the Richmond outfit in January after deciding they needed somewhere to farm out their best emerging talent in order to boost their development.
With just two professional teams north of the border, the deal gave youngsters and more experienced campaigners struggling for game time the opportunity to play in the English Championship.
The likes of wing Rory Hughes, who was named in Scotland's pre-World Cup training squad, was sent south from Glasgow and scored five tries in just four games.
Former Glasgow coach Sean Lineen, now the SRU's head of international age-grades, was also seconded to Scottish as director of rugby in January.
But a day after a report in the Sunday Times claimed the SRU had walked away from the partnership because of concerns over the "business model and commercial viability of Scottish", the governing body confirmed the plug had been pulled.
They said in a statement: "Th e Scottish Rugby Union Board has ended the Development Partnership we had been operating since January.
"After a period of review and reflection (at the end of the season) the Scottish Rugby Board decided not to deepen the relationship with London Scottish further as the performance environment in place was not sufficiently developed to offer the player pathway we had envisaged.
"It is disappointing that despite the best efforts of both parties we have been unable to progress the player development pathway as we had both hoped. We will stay close to London Scottish and remain supportive of their strategic ambitions."
However, London Scottish chairman Sir David Reid insists there is nothing wrong with his club's balance sheet.
"The SRU can have no concerns whatsoever about our finances," he told the club's website. "The SRU Board has known all along that our model, as for most Championship clubs, requires investors to step up and support the operational costs of running the club and since 2008 our great group of over 140 investors has contributed over £5million to the cause.
"They will be bridging the gap as usual next season, though we have been closing the gap and need to raise much less than in previous years."
"Remember, this partnership was the SRU's idea in the first place, and they offered to second 14 players as well as coaching and support staff. We therefore budgeted accordingly to fund fewer players and instead to cover the extra costs of accommodation and better training facilities.
"When, only last month, the SRU revised the offer to only 10 players, and none of them senior players, London Scottish had to find extra players at extra cost. With pre-season a few weeks away, our budget and planning were suddenly blown off course."
"We therefore questioned the support costs we were due to cover, and sought to negotiate this point. However we agreed last week to find the additional funds, only to be told the SRU felt they could not justify their own expenditure on the project."
With the deal now scrapped, Scotland Under-20s prospects Tom Galbraith and Ben Robbins who had been looking forward to featuring for Scottish next season will now have to return home.
London Scottish p resident Rod Lynch added: "To have something like this dropped in our lap one week before pre-season training starts has an obvious financial and operational impact on us. We will now have to scramble in the market for replacements.
"It would be an understatement to say we are disappointed.
"We maintain that the English RFU Championship is the right place to introduce Scotland's talented young players to the rigours of professional rugby, within the exile Scottish family.
"The increasing co-operation, with coaching support from Sean Lineen and Roddy Grant, and young players on loan from Scotland, seemed an exciting foretaste of what was to come. Instead, Scottish Rugby, and the talented young Scots who want to play for their country will be the poorer."
Source: PA
