The Heineken Cup has been plunged into crisis after French clubs said they would boycott next year's competition.
France's leading 14 teams say the row in England between the Rugby Football Union and Premiership clubs has led to uncertainty over the event's future.
"French clubs will not be participating in next season's tournament," said a Ligue Nationale de Rugby statement.
European Rugby Cup, which runs the competition, says talks over the future of the Heineken Cup are "ongoing".
There have been doubts over the competition's future for months because of threats of a French boycott while in England, the Premiership clubs are demanding a greater say in running the event.
Premier Rugby, the umbrella organisation representing top-flight clubs in England, is determined to see Premiership clubs become direct stakeholders in European Rugby Cup Limited (ERC).
There is too much uncertainty about the future of the English clubs
LNR president Serge Blanco
The RFU is reluctant to agree, saying it will not negotiate a new agreement with the English clubs until they agree a new arrangement over the management of elite players.
And LNR, Premier Rugby's equivalent in France, says the row centres on an alleged agreement by the RFU and the French federation to give 50% of their stakes in ERC to their clubs.
"After months of talks, this principle had been accepted, also by the RFU," said an LNR statement.
"But the RFU today claims that they don't have an agreement with Premier Rugby."
And former France international full-back and LNR president Serge Blanco claimed in the Daily Mail: "The RFU changed their mind, had they not done so, we would have signed the new agreement for the future of the Heineken Cup.
"But now there is too much uncertainty about the future of the English clubs."
French clubs are also concerned at the impact of the European competition on their domestic schedule because of the 2007 World Cup.
France will host the World Cup in September and October, thereby delaying the start of the Top 14 campaign, and the clubs say there is no room to squeeze in the Heineken Cup.
Top 14 games could take place during the World Cup but LNR believes its members would suffer because of the huge decrease in television and sponsorship revenues.
And LNR's statement comes after months of negotiation failed to find a solution to the problem.
Our championships are losing their value
"Due to the gravity and urgency of the situation, the LNR has consulted with all the presidents of the Top 14 clubs," said the statement.
"They have all unanimously indicated the conditions do not exist for the LNR to sign the new agreement governing the European Cup (due to take effect in 2009) and, because of this, French clubs will not be participating in next season's tournament."
Blanco added that his organisation was left with no choice but to take drastic action.
"We are convinced that if we did not do this our domestic championship will be dead in 2009," he said.
"Next season in England 10 of the 22 rounds in the Premiership will be played during international weekends, which is ridiculous.
"Our championships are losing their value."
606 DEBATE: Have your say on France's boycott
ERC is adamant the row will not affect the negotiations over the Paris Accord, the agreement detailing the structure of the Heineken Cup and European Challenge Cup, which runs out in July 2007.
"ERC is aware of the statement issued by LNR," said an ERC spokesman.
"The six stakeholder nations are currently undergoing a process of reviewing and re-negotiating the Paris Accord.
"The last stakeholder meeting took place in Dublin on 13 January, when the French Union but not the French clubs were represented, and a draft document was produced for consideration by all parties.
"The next meeting will take place on 14 February."