By HELEN TUNNAH and AGENCIES
Competition leaders the Bulldogs have been stripped of 37 points and fined A$500,000 after admitting major breaches of the sport's A$3.2 million salary cap for players.
NRL chief executive David Gallop said yesterday was a "bitter day" for rugby league.
"Indeed the game has had its heart broken in an unexpected way."
Unless the decision is overturned on appeal, the team will be left languishing at the bottom of the NRL table after being favourites to win the minor premiership.
The Bulldogs will also face further scrutiny.
The penalty imposed related only to admissions by the club that it deliberately deceived the NRL and rival teams over salary cap breaches of more than $1 million over the past two seasons.
Allegations that more breaches were planned have been made in Australian media, and the NRL said the Bulldogs would be audited again this year.
The NRL has given the Bulldogs a chance to admit now to any more breaches, or face stiff penalties if problems are uncovered later.
The punishment immediately pushed the New Zealand Warriors (36 points) to the top of the NRL table.
They were joined last night by the Knights, who thrashed the Broncos, 40-10.
The Broncos have 35 points.
Warriors chief executive Mick Watson said he applauded David Gallop and the NRL for taking a tough stand.
"It was a severe penalty, but in essence it was a deceitful web of cheating.
"I fully support David Gallop. This is not something to feel proud about."
Watson said his focus over the next day would be to protect his players' environment as they fly to Sydney for tomorrow's match against the Sydney Roosters.
He said if his players stayed at the top of the table it would not be fair to call that a "hollow" achievement.
"I don't believe so. Our players have worked hard, we've beaten that club [Bulldogs]."
The Bulldogs' deception was exposed a week ago by two Sydney Morning Herald reporters, who uncovered documents detailing the salary cap overpayments.
The newspaper revealed 12 Bulldogs were receiving payments the NRL had not been advised of, including star standoff Braith Anasta. His official salary was listed as $A205,000, but the newspaper said he was paid an additional $A271,000.
Gallop said that because of the extent of the breaches and the elaborate way they were engineered, the NRL had little choice but to hand down a severe penalty.
The revelations forced the resignation of Bulldogs chief executive Bob Hagan and yesterday his replacement, former Bulldog Steve Mortimer, said the club would contest the NRL breach notice but would not take further legal action.
He said the players would turn out to face the Canberra Raiders tomorrow, and urged the public to give his team some space.