The clubs will then get together and reincorporate and reapply to the NZRU.
"It would be fair to say, without pre-empting any decisions our board will make in the future, that any application for incorporation will have to have constitutional changes that reflect the skills needed."
Tew said there needed to be the right mix of people on the board, which he felt was too big at present, and needed more independent directors.
Delivering the news the union was set to go into liquidation was something that brought no pleasure to Tew.
"People were shocked, although the majority of people were not completely surprised," Tew said.
"There were tears rolling up in some of those staunch loyal guys, the life members. It is not something you want to do much in your life.
"We want Otago rugby to be in the ITM Cup. We do not want to get rid of 131 years of history. The reality is this organisation is so debt laden that I can not see a way out of it.
"Do we need to have some realism brought into this world? Do we need to send a message that we can't constantly loan money to unions to live beyond their means? Yes, we have reached that point. It is not a decision taken lightly, and we have never considered this before.
"But it is not responsible to continue. In fact it is illegal, and the directors would be acting irresponsibly if they continued to trade."
The Otago union would not be privatised even if some investors were found as the national union now owned all the intellectual property.
The ITM Cup was evolving into a competition where players who played club rugby were paid only for playing.
"The ITM Cup will settle as a competition which is amateur and players that are paid during the period the competition is on as opposed to fully fledged professionals who wait for the competition to start. They [ITM Cup players] will have a life outside rugby. Some might be in academies, but most will be picked on form this year, and paid a modest amount to play in this competition.
"What we will be looking for [from Otago] is some comfort that this money can be raised. We would not be comfortable to have a budget that says we will get 25,000 people to every game. This Friday is the day the union goes into liquidation. We will give them a week or two."
With the union saddled by a $2.35 million debt, Tew doubted there would be any last-minute rescue.
"There is always hope. We have worked pretty hard. We won't stop trying but really we believe over what has been decided and we are very focused on what happens next."
The union has received financial commitments of $300,000 over the past couple of days but nothing has emerged which has chairman Wayne Graham "jumping for joy".
Graham said he had been heartened by the commitment of sponsors and individuals.
"We have got some commitments of up to $300,000 in the past two to three days from various individuals. We need to work through this quickly and then try and work on securing our players," he said.
Alhambra-Union club chairman Gary Wheeler was critical of some of the players contracted by the union last year.
$1.1 million was spent on contracted players and this included more than 12 from other unions who played club rugby to see if they were up to standard.
"I still question that if the board knew the state of the finances why they contracted so many players from outside Otago last year," Wheeler said. Otago Daily Times
