Worcester Warriors have withdrawn their proposal to play in the Championship next season and will rebrand as Sixways Rugby, says owners Atlas.

But Jim O’Toole, who led the Atlas takeover alongside James Sandford, said they have pulled out of talks.

“This is devastating news for rugby fans across the Midlands,” said a government statement.

Following a meeting with the RFU over the ongoing debate about the future of professional rugby in Worcester, the Department for Digital, Culture, Media and Sport statement added: “The government has done everything it can to protect Worcester Warriors, including through financial support during the pandemic.

“Despite repeated assurances from the Atlas consortium, we are deeply disappointed that fans will no longer be able to support their club in the Championship – either next season or beyond.

“We fully support the RFU in its objective to obtain all necessary information with regards to the club’s sustainability and ownership when participating in their competitions.”

Former Warriors chief executive O’Toole, whose consortium only took over Worcester last week, told BBC Hereford & Worcester that their decision was a result of “a number of key clauses in the contract that we and the investors couldn’t accept”.

“It would have given the RFU control over decisions that we as a business will have to take,” he said.

“This decision will clearly upset and annoy a number of people. The sad fact of life is that the Worcester Warriors brand and the Worcester Warriors business is gone.

“We didn’t want to go down to the 10th tier as Worcester Warriors, so the name sadly will disappear. We are rebranding as Sixways Rugby. We’re starting afresh. We believe it’s time for a new start. The church has closed down.”

The RFU would need to approve any name change, as well as confirming that O’Toole and Sandford have passed the owners’ test.

A statement was issued from Twickenham on Thursday, saying: “The RFU has been clear that its priority was to enable Worcester Warriors to play in the Championship and Worcester Warriors Women in the Premier 15s in a sustainable way.

“The information required has been asked for repeatedly and deadlines were extended to provide the best possible chance for this to happen.”

What’s the background?

Worcester, whose debts totalled more than £30m when they went under, were suspended from the Premiership in September.

The club were then relegated and their players had their contracts terminated the following month.

Former director of rugby Steve Diamond headed up one consortium looking to take over Worcester, but it was O’Toole and Sandford’s Atlas group who were made preferred bidders by administrators Begbies Traynor.

Worcester’s application to return to professional rugby for the 2023-24 season was then rejected by the RFU, who at the same time approved Wasps – provided they adhere to a number of conditions.

Atlas were appointed as Warriors owners at the start of this month, subject to RFU approval.

Begbies Traynor’s Julie Palmer told BBC Hereford & Worcester: “I am not making further comment at the moment. The focus needs to be on the purchaser and their plans, not just now but for a sustainable long-term model.”

What next for Sixways?

There remains widespread speculation that fellow relegated former Premiership side Wasps, looking for their fifth home in 27 years, may move to Sixways next season.

O’Toole described talk of a merger as “a non-starter”, while Wasps, previously linked with a move to Solihull Moors’ Damson Park, said they were still in talks with two potential landlords, both based in the Midlands.

A club spokesman said: “Wasps are working around the clock to meet RFU requirements and deadlines so that we can compete in the Championship for the 2023-24 season.

“We are making very positive headway on all key criteria and are confident of meeting Tuesday’s deadline. We have been in constant communication with the RFU and kept them informed of our progress.”

Instead, the new Worcester club will ally with fourth-tier side Stourbridge, who O’Toole says will play at Sixways, with a target of reaching the Championship by 2026.

The future at Sixways of Worcester’s women’s side and local football team Worcester Raiders, who currently share the artificial Sixways surface, is now also in doubt.

“Worcester Warriors (women) and Worcester Raiders will see out the season at Sixways,” added O’Toole. “But we believe we need another tenant and are in talks.”

From Stourton Park to Sixways?

Semi-professional club Stourbridge, whose Stourton Park home is 23 miles up the M5 from Sixways, are currently bottom of National League Division Two West, having won just once in 18 games this season – and are under serious threat of relegation.

“We will invest the maximum we can within the RFU regulations to get the club through the leagues to get to the Championship by 2026,” added O’Toole.

“They’ll in effect become our first team in our journey to returning to top level rugby. They will play at Sixways from the start of next season.

“We’ll be sustainable, not reckless. The ultimate goal is to get back to the Premiership but the gut feeling is that it will be ring-fenced.”

Stourbridge confirmed the Sixways tie-up in a letter to members, saying: “These discussions have been ongoing following the successful appointment of Atlas Group as owners of Sixways, with a view to Atlas supporting Stourbridge commercially not only at first XV level.

“Atlas Group is proposing a long-term investment into our playing infrastructure to grow our club to becoming a Championship level club (and beyond) in the men’s and women’s game.

“The proposals being put forward can only be agreed upon following the full consultation and consent of Stourbridge Rugby Club membership at a proposed SGM.”

The RFU says it will now consult with the local rugby community over the Worcester/Stourbridge tie-up.

Analysis – ‘This not a done deal’

BBC rugby correspondent Chris Jones

While Atlas say they will partner with Stourbridge, become Sixways Rugby, and play at Sixways, it is not a done deal.

Any tie-up with Stourbridge will need to be approved by their members. The club is holding a Special General Meeting on Friday night.

Interestingly, in the letter sent to Stourbridge members there is no mention of the club moving to Sixways as Atlas suggest in their exclusive interview with BBC Hereford & Worcester.

There is also anger from former Warriors employees that this latest development will mean the millions of pounds owed to rugby creditors will go unpaid.

One former member of management has branded it “absolutely disgusting”. Supporters will also be devastated that their beloved club won’t be coming back.

Atlas co-owner Jim O’Toole was talking to BBC Hereford & Worcester’s Andrew Easton