Scottish Rugby has brought an end to its partnership with English Championship side London Scottish.
It was hoped the link-up would provide a "competitive step on the performance pathway for both players and coaches".
However, Scottish Rugby chiefs felt the arrangement was not working and elected to end the partnership, a decision which has angered the English club.
"It would be an understatement to say we are disappointed," said London Scottish president Rod Lynch.
The move comes just four months after the link-up was announced amid much positivity from both parties.
"This is an exciting, logical partnership, which benefits both organisations, who share the common objective of developing and improving Scottish rugby," said Scottish Rugby chief executive Mark Dodson in January, as he looked forward to working with the Exiles "in the seasons to come".
But in a short statement on Monday, the governing body said it "decided not to deepen the relationship with London Scottish further as the performance environment in place was not sufficiently developed to offer the player pathway we had envisaged".
'Scottish Rugby will be poorer'
Former Glasgow Warriors head coach Sean Lineen was installed as London Scottish's director of rugby in January, with recently-retired Edinburgh back-row Roddy Grant brought into the coaching set-up.
The relationship between the club and Scotland's governing body has deteriorated, however, with finances seemingly at the heart of the problem.
"Remember, this partnership was the SRU's idea in the first place, and they offered to second 14 players as well as coaching and support staff," said London Scottish chairman Sir David Reid.
"We therefore budgeted accordingly to fund fewer players and instead to cover the extra costs of accommodation and better training facilities. When, only last month, the SRU revised the offer to only 10 players, and none of them senior players, London Scottish had to find extra players at extra cost. With pre-season a few weeks away, our budget and planning were suddenly blown off course.
"We therefore questioned the support costs we were due to cover, and sought to negotiate this point. However, we agreed last week to find the additional funds, only to be told the SRU felt they could not justify their own expenditure on the project."
Lynch believes the partnership had great potential, and feels that the decision to sever ties will only harm Scottish rugby.
"We maintain that the English RFU Championship is the right place to introduce Scotland's talented young players to the rigours of professional rugby, within the exile Scottish family," he said.
"We believe the partnership, which had effectively been in operation since the SRU announced it to the press in January, was the way forward for Scottish Rugby. The increasing co-operation, with coaching support from Sean Lineen and Roddy Grant, and young players on loan from Scotland, seemed an exciting foretaste of what was to come. Instead, Scottish Rugby, and the talented young Scots who want to play for their country, will be the poorer."
'We remain supportive of their strategic ambitions'
Scottish Rugby explained the reasons behind their decision to end the relationship in a short statement on Monday.
"After a period of review and reflection (at the end of the season) the Scottish Rugby Board decided not to deepen the relationship with London Scottish further as the performance environment in place was not sufficiently developed to offer the player pathway we had envisaged," it read.
"It is disappointing that despite the best efforts of both parties we have been unable to progress the player development pathway as we had both hoped. We will stay close to London Scottish and remain supportive of their strategic ambitions."