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SYDNEY - After just one season, the Australian Rugby Union has decided to scrap the Australian Rugby Championship (ARC) after the competition suffered a A$4.7 million ($5.4 million) loss in 2007.

A thorough review of the tournament revealed it was more than A$2 million over the ARU's budgeted investment, plus there was a forecast of a further A$3.3 million in losses next season.

The cumulative loss of A$8 million in just two years would be fiscally irresponsible, the ARU said.

"Strong leadership is paramount to the success of our game and, to that end, there are times when tough decisions need to be taken," said ARU deputy chief executive Matt Carroll.

"Continuing with the ARC was considered by the (ARU) board to be an untenable financial risk for the ARU and rugby as a whole."

The ARU did say the failed league achieved many player development goals and the union remained committed to improving talent pathways for players and coaches and expanding the game nationally.

"While the format of ARC and the stakeholder investment strategy has proven to be flawed, the concept of an affordable high-quality rugby competition remains a key strategy," Carroll said.

"We want to reach a full understanding and agreement on the most appropriate structure for the game in this country."