SFA chief executive Stewart Regan has moved to clarify his views on the future of Rangers.
Regan raised concerns of social unrest following
the SPL vote to reject Rangers' application to play in the top flight.
However, he told BBC Scotland: "It's important to stress that the reference to social unrest was in the context of no Rangers being in existence."
He believes the club should play in the First Division next season.
Rangers FC plc entered administration in February owing up to £134m to unsecured creditors. The company will eventually be liquidated and has been replaced by a new company run by Charles Green.
The club will now seek membership of the Scottish Football League, with many Rangers supporters appearing keen for the side to play in Division Three.
However, Regan said that outcome could have dire consequences for Scottish football.
Rangers crisis explained
- Rangers went into administration owing up to £134m to unsecured creditors and will eventually be liquidated
- As a result its registrations with the Scottish FA and Scottish Premier League were terminated
- Charles Green led a consortium which bought Rangers' assets for £5.5m
- The former Sheffield United chief executive is reforming Rangers as a new company
- But the 'newco' did not get the required votes for re-admittance to the SPL
- Instead the new Rangers could start life in Scottish Division One
"My discussions with a number of media outlets last night centred on what may or may not happen to Rangers in the future," he said.
"In the event there wasn't a Rangers, that's got dire consequences of the game and for Scottish society, generally.
"The economic impact and social unrest are all things that could result as an impact of having no Rangers.
"However, I think the main focus last night was talking about what happens to Rangers in the immediate future after yesterday's decision by the SPL and trying to focus on which division Rangers will play in next season.
"That matter will be considered next week by the Scottish Football League and, hopefully, there'll be an outcome whereby Rangers will be accepted into Division One of the SFL; which would allow some financial stability for clubs in the country."
SFL clubs met on Tuesday to discuss a Scottish FA proposal for Rangers to enter Division One but the Glasgow giants could begin season 2012-13 in Division Three if that idea does not gain the support of a majority of clubs.
Eleven out of the 30 clubs have already indicated their opposition to Rangers entering Division One, with a vote scheduled to take place on 12 July.