Melbourne Storm chief executive Ron Gauci says if the ARL Commission allows Parramatta to bend the rules to sign Israel Folau, rugby league's salary cap could turn into a farce.
The Eels have put a radical proposal to the ARLC to allow them to spend $AU400,000 over the $AU5 million cap in 2013 in order to accommodate Folau, then spend the same amount under the limit the following year.
The Commission maintains that "the integrity of the salary cap is paramount" and is continuing to work with Parramatta in order to get Folau back to the NRL.
But Gauci, whose Storm outfit have been hit hardest by sanctions for rorting the salary cap, including being stripped of the 2007 and 2009 premierships, said he couldn't see how the ARLC could consider Parramatta's request.
"The commission needs to tread very carefully in regard to this," Gauci, who was appointed Storm chief executive in 2010, told AAP on Monday.
"We have been forced to let go of players for next season we would have certainly kept if we knew there were some sort of exceptions or appeal process involved and I know other clubs are in the same position.
"This type of massaging of the cap has the potential to create precedent and it opens up a Pandora's box.
"I would be very disappointed and surprised if the Commission allowed it."
"If it is allowed the salary cap could become a farce."
The ARLC would only say that negotiations between the game's governing body, the Eels and Folau and his management were ongoing.
"We are continuing to work with Parramatta and to work within the salary cap," a spokesman said.
"The integrity of the salary cap if of paramount importance."
Parramatta boss Ken Edwards said the Eels were forced to make the radical request.
"It is an extremely complicated situation," Edwards said.
"Both the ARLC, the NRL and Parramatta have all worked very hard to come to a resolution on the matter.
"(But) it is becoming frustrating. We need to know as a club where we are so we can move forward and so does Israel Folau."
Edwards met with ARLC chairman John Grant on Friday to discuss the proposal which would average the club's expenditure on players over the 2013 and 2014 seasons.
Folau quit his lucrative AFL contract with Greater Western Sydney on November 1 and since then the ARLC and the Eels have been at loggerheads over the former international.
The Eels wanted to register Folau on a contract worth $150,000 a season - a move rejected by salary cap auditor Ian Schubert.
"We have been open and transparent from the start," Edwards said.
"We haven't tried to keep anything (hidden)."
The news came on a day Parramatta announced a new five-year deal with Venues NSW over the use of Parramatta Stadium as the club moved to allay fears from fans they could abandon their home since 1986 - the year of their most recent premiership win.