The English and French clubs have both boycotted the Heineken Cup and European Challenge Cup in a row over shareholding and voting rights.

The absence of European competition will cost the Scottish, Irish, Welsh and Italian unions around £2million each.

But it is the Scots, already in reeling from their current financial crisis in their bid to service a £23m debt, who are most exposed to the fall-out.

The SRU have only just announced the closure of the Borders as a professional entity - with the belated attempt to save the club now looking even more fanciful.

Now the SRU fear the boycott could signal the death knell for professional rugby in Scotland, which in turn would have the most dire consequences for Irish rugby.

"The French and English clubs' decision to withdraw from the two levels of European competition run by ERC will have a significant rugby and financial impact on all participating countries, and especially for Scotland," said an SRU statement.

"It is clear that if there is no European competition in the 2007-08 season, Scottish Rugby's net revenue will reduce by over £2million, some of which is shared with Edinburgh Rugby Ltd.

"The future viability of the professional game in Scotland could be jeopardised if a successful outcome cannot be reached from these negotiations."

The SRU are set to take the case to the International Rugby Board and backed the Rugby Football Union's decision to take legal advice over the English clubs' decision to boycott.

"Scottish Rugby is pleased to learn that the RFU will be taking further legal advice in the next few days before reaching its final decision over its position.

" Scottish Rugby will consider matters further after next week's Dublin meeting and an approach to the IRB is likely."

The SRU confirmed they will attend next week's European Rugby Cup Ltd meeting in Dublin to ascertain exactly where the remaining unions stand.

The statement added: "Scottish Rugby representatives will take part in next week's meetings with ERC in Dublin and will seek to clarify how yesterday's decision will impact on all other remaining participants from Scotland, Ireland, Wales, and Italy."

The current ERC agreement expires this season and negotiations have been going on for 16 months to nail down a new long-term deal.

As part of the new agreement Premier Rugby - umbrella body for the 12 Guinness Premiership clubs - want the Rugby Football Union to hand over 50 per cent of the shareholding and voting rights of ERC Ltd.

Premier Rugby say an agreement to that effect was reached with the RFU last October, although Twickenham bosses have categorically denied this.

The RFU say they would concede to the clubs' request but not in isolation - they want it to form part of a wider-reaching domestic agreement covering international release periods and player welfare.

RFU management board chairman Martyn Thomas will meet with Scotland and the other three affected unions on Wednesday to thrash out ways to support European rugby financially.

Thomas claimed the Anglo-French boycott could "devastate northern hemisphere rugby".

He said: "We are concerned at the effect the English and French clubs actions will have on the other shareholder unions in ERC who will also suffer significant financial losses.

"We will be calling a meeting of these unions shortly to discuss ways in which European rugby can be supported."

Both the RFU and Premier Rugby remain entrenched in their positions. But, publicly at least, they are hopeful a deal can be struck to resurrect the competition.

Leicester chairman Peter Tom said: "There would have to be meetings in a very short period of time in which all of the current issues can be agreed. "