New Zealand rugby's leading administrator has warned that the country will be reduced to the ranks of second-tier rugby nations unless the current player drain is plugged. While the All Blacks' outside-half Dan Carter is considering a £1m move to join Toulon next season and add to the army of former All Blacks in Europe, the flanker Jerry Collins is being chased by Bath and Llanelli Scarlets.

"If the drain on our players continues at the current level - not just the superstars but right throughout our game - then we are going to be confined to Tier 2 status very shortly," said Steve Tew, the New Zealand Rugby Union's
chief executive. "We have not put the white flag up and we are committed to retaining as much of our talent as we can, but if the numbers being bandied about are true, we have a fight on our hands."

The NZRU has made Carter an offer which would allow the 26-year old to play in Europe for six months next season and miss the Super 14 campaign, returning home for the 2009 Tri-Nations series. "It is something that might work for Dan," said Tew. "We have to tailor our offers to the individual, but the financial challenges for rugby in New Zealand are up front and in the headlights."

While the club game in Europe is commercially vibrant, a number of provincial unions in New Zealand are in danger of financial collapse. The Super 14 series is proving a turn-off for spectators and television viewers, forcing the NZRU to exploit the pulling power of the All Blacks.

South Africa are also suffering from an exodus of players overseas. Three of last year's World Cup squad, Bryan Habana, Bakkies Botha and Wynand Olivier, are threatening to go on strike this summer and not play for the Springboks following the refusal of the South Africa Rugby Union to allow the second row Botha to take up a lucrative offer from Toulon.

Habana's father, Bernie, is the agent for all three players and Botha is taking legal action to have his provincial contract with the Bulls nullified, which would allow him to move to France.