Welsh Rugby Union approves emergency loan to Welsh regions

The Welsh Rugby Union has agreed an interest-free loan of £660,000 to be shared between the four Welsh regions.

The four sides face serious cash-flow problems after money for playing in the European Cup was withheld.

European Rugby Cup, the company that runs the tournament, took the decision on legal advice because of uncertainty over its own future.

A WRU board met to consider the regions' loan application on Tuesday and approved the financial assistance.

The four Welsh regions - Cardiff Blues, Newport Gwent Dragons, Ospreys and Scarlets - were expecting 200,000 euros each from ERC last month, part of a series of staged payments for competing in the Heineken Cup this season.

But ERC said the latest payment was not due until after a meeting on 5 February and has since moved that deadline back to 19 February while it examines its own future.

A further meeting of the ERC board takes place in Dublin on Wednesday and will consider whether to release the outstanding payment to the regions.

It was supposed to be the second of five payments made to clubs playing in the tournament.

BBC Wales understands the Welsh sides faced serious difficulties in paying January's wages because of the cash shortfall.

The possibility that ERC may be wound up has come about because England's leading clubs will not play in tournaments run by the company from the end of the 2013-14 season.

However, after a "positive meeting" last week between the stakeholders, the creation of a new European Cup competition appears to have moved a step closer.