Barclays Bank, which is owed more than £60m by the Welsh Rugby Union, is to install its own financial expert to superintend the day-to-day running of the governing body and oversee cutbacks.
A senior WRU official said last night: "We do have financial problems and Barclays have made it plain that we need help from outside. They are recommending a number of experts, and while we are not obliged to take anyone we are not in a position where we could pay if the bank called in the debt. We have no choice but to follow the path they advise."
The Millennium Stadium has been such a drain on resources that the WRU's debt stands at some £70m while its annual income is £27m, although the union will tell the agm of its clubs later this month that it made a profit of £250,000 last year.
Barclays' intervention has coincided with an announcement by the WRU chairman Glanmor Griffiths, who is also chairman of Millennium Stadium plc, that he will step down by the end of August to concentrate on his business affairs.
By then, the WRU should be able to appoint a chief executive to run the stadium, three years after first advertising the post, while the favourite to succeed Griffiths as the union's chairman is the former Wales captain David Pickering.
Two months ago, Barclays hired the accountants Coopers and Lybrand to study the WRU's finances and establish when the union could start repaying the capital on the £55m it borrowed five years ago to build the stadium.
The WRU pays nearly £4m in annual interest and it also has a £5m overdraft facility. It assumed that it would get increased funds from the new Six Nations TV contract, but with only the BBC bidding for the rights, it is more likely to suffer a reduction.
That prospect, together with a forecast of interest rate rises, has forced Barclays' hand. It is not in a position to call in its debt and put the stadium up for sale because BT owns part of the freehold and will not sign it over until it receives the £15m that the WRU owes it.
Wales' national squad will feel the pinch. Win bonuses will be cut from £5,000 to £3,000 while appearance fees based on games played, worth nearly £3,400 a match to those with 40 caps or more, will be replaced by an across-the-board £1,000.
Funding received by Wales's nine premier clubs will remain at £8.1m. They were promised an extra £1m but the WRU is unable to deliver that. The Welsh league remains unsponsored while the WRU is seeking a jersey sponsor following the withdrawal of Redstone.
The union has been slow chasing up money owed by its clubs. For example, Llanelli have yet to repay the £1.25m they borrowed as a mortgage on Stradey Park five years ago, all the top clubs were given a £200,000 loan when rugby turned professional in 1995, and clubs owe £400,000 from ticket sales for the 1999 World Cup.
"We need to run our business in a far more commercial manner," said the WRU source. "We have been living too much in the amateur era and painful decisions now have to be made."
