London Scottish have delayed pre-season training as they lack players because of their cancelled partnership with Scottish Rugby, centre Alex Grove said.
Under the joint venture, the union (SRU) had pledged to supply Scottish with young players and coaches.
"It's really not a great situation," Grove, 28, told BBC Scotland.
"They've got to find half a squad from somewhere at a time of year where everyone's sort of signed up elsewhere."
The two parties announced on Monday that the initiative had been ended just five months after it had been announced.
Grove, who was on loan at Scottish earlier this season, had sympathy for the club but questioned their approach.
"I feel sorry for London Scottish that the deal's been pulled, but I don't think they've done themselves many favours," he said.
"They've allowed a lot of senior players to leave on a promise they're getting these young guys.
"If I'm the SRU, I'm then thinking, do I want to be sending a load of young guys down there to create an academy side?
"Do we want to create an under-23 side, essentially, struggling at the bottom of the league?
"Possibly the SRU questioned London Scottish's ambition. Do they really have a squad, the firepower capable of pushing for top-four play-off spots?"
Scottish Rugby suggested on Monday that its board felt "the performance environment in place was not sufficiently developed to offer the player pathway we had envisaged".
Exiles president Rod Lynch criticised the decision, while chairman Sir David Reid was irked that the number of players provided had been cut from 14 to 10, and "none of them senior players".
Former Glasgow Warriors head coach Sean Lineen had been appointed director of rugby, with former Edinburgh back-row Roddy Grant joining the coaching staff until the end of the season, bringing "a clear shift in focus", and energising the squad, according to Grove.
Neither will be a part of the set-up in the forthcoming season.
Grove, who has been released after 10 years with Worcester Warriors and won three caps, believes the Scottish player development pathway, as well as the club itself, could suffer.
"Robbie Fergusson and George Horne, when I was there, those two guys, who are possibly blocked at the moment at Glasgow, have come down and been excellent," Grove said.
"They've really benefited from regular rugby. They're young, enthusiastic, full of energy. More importantly, they're willing to learn, grow and challenge themselves.
"Imagine having 12 players like that; the club would be in a far better place."
Grove fears Scottish, who finished eighth last season but reached third place in 2014-15, will struggle to compete in the forthcoming campaign.
"They were meant to start pre-season yesterday and that's had to be delayed because of the lack of players in the squad," he said.
"It would be frustrating as a player to be in the middle of this - the guys that were going to come won't get rugby at that level and the guys they signed on that thought they were going to have that partnership are going to be frustrated.
"They would have had a squad they felt could have competed for the play-offs and now, with the young guys not coming and the old guys leaving, they've barely got 15 guys."