Walter Smith admits only time will tell if Rangers can survive without Champions League football after it was confirmed that Scotland will lose one of their two places in the competition from the season after next.
A fall to 16th in UEFA's co-efficient ranking table also means the 2010-11 SPL champions will not qualify automatically for the following season's Champions League group stage.
The importance of participating in Europe's premier club competition was highlighted in the financial results of both Glasgow clubs in the last few days.
While Rangers announced a profit of just over £13million for the six months up to the end of 2009, largely thanks to their involvement in the Champions League, Celtic reported a decrease in turnover of almost 23 per cent and increased debt from £0.97million to £3.13million after failing to qualify.
Those figures, combined with the loss of a Champions League spot, means that much more than bragging rights will now be at stake when both clubs battle to be crowned Scottish champions in future seasons.
Smith admits the Old Firm are partly to blame for the situation they now find themselves in but he also believes UEFA need to revamp their competitions or other clubs throughout Europe will continue to suffer along with Rangers and Celtic.
“It's hard enough as it is and this is obviously disappointing from our own country's point of view,” he said. “It's happening to big clubs throughout Europe and a lot of big clubs in smaller countries are suffering.
“In Scotland, for both Rangers and Celtic, we have shown recently just how much Champions League involvement means to us in a financial sense in terms of keeping the clubs going.
“It puts each of the clubs under pressure because there isn't even automatic qualification for one of the clubs either.
“The penalties for not getting to the Champions League are big.
“Yes, you could say on one hand
it's our own fault because we have to have the proper co-efficient to get there. But, unfortunately, it needs financial wherewithal to actually achieve that as well. It's a very difficult aspect for each of the clubs to adjust to.
“It's something I feel UEFA have to look at. It's not only Rangers and Celtic — other big clubs in small countries are finding it extremely difficult to handle the circumstances they are being placed in financially.
“If you look at the financial implications for both clubs, who announced their mid-term accounts over the last few days, you see the need for the Champions League.”
Meanwhile, Rangers hope to extend their lead at the top of the SPL to 13 points in today's early kick-off against St Johnstone, before Celtic face Dundee United later this afternoon.
Saints triumphed with a surprise 5-1 win over third-placed Hibernian earlier in the week.