Campaigners attempting to save the Border Reivers for next season have conceded defeat, BBC Sport understands.
Border Reivers face being disbanded this summer
Scottish Rugby announced two weeks ago that it would close the Magners League outfit this summer.
But the Borders Rugby Action Group had appeared confident that a rescue package could be found.
The SRU insisted there would be no finance available from the governing body and the action group will now aim to resurrect the team in 2008.
Scottish rugby's governing body appears to have won the support from clubs in the Borders area for the decision to scrap the Reivers and divert resources to Glasgow Warriors.
There was even a lack of support for retaining the Reivers as a development side at a meeting attended by the SRU's chief executive at Gala RFC.
Terence Froud, a representative from Hawick, said: "I thought that Gordon McKie delivered a well thought through and strong case.
"It's now clear that to keep two teams would not be realistic."
Border League vice-president John Davidson said: "Now that I've heard the details first hand, I'm satisfied that the Union has taken the correct long term decision for Scottish Rugby. "It is important for the good of the game that Border clubs work constructively with the SRU in promoting the club game in the Borders and to continue to promote the development of young players.
"To that end, further meetings are planned to take place in the near future to progress matters."
BBC Sport Scotland's Chris McLaughlin has been following the story and commented: "The consortium who are hoping to save the Borders Reivers have just realised that the SRU will not give them any financial backing at all towards any rescue plan.
"The consortium have had another look and realised that they would not be getting any significant money from the SRU.
"Basically, their sums did not add up.
"Maybe at some point in the future, for the season 2008/2009, they may be able to resurrect the Border Reivers, but certainly, for next season, there will be no Borders Reivers."
Given the SRU's reluctance to offer immediate financial support, the consortium could find opposition to any regenerations plans, since a lot of the Borders players are already targeting contracts with other clubs.
"I think it's going to be very difficult indeed to get everything together that they need to organise a pro team from scratch," our correspondent added.
"Steve Bates, the coach of Border Reivers, told me last week that, if there is going to be a rescue package for Border Reivers, it would have to happen yesterday, because most of the decent players are looking to go elsewhere.
"It's hard enough to rescue a side that is almost dead, but to rescue a side that is dead and to create a pro team from scratch when the appetite is not quite there, is going to be extremely difficult indeed."