Scottish rugby appeared to be on the brink of meltdown last night after the governing union threw the Edinburgh professional club out of Murrayfield, giving the club 24 hours to repay £1.4 million it says it paid the club over the past year.

Behind the scenes, however, there are moves that could bring the dispute to a head over the weekend and lead to a settlement early next week. The latest twist in the row between the Scottish Rugby Union and the independently owned Edinburgh club came yesterday morning when the governing body announced that Edinburgh had terminated a key agreement.

“Consequently Edinburgh Rugby no longer have any rights to play or train at Murrayfield and Scottish Rugby has asked when they plan to vacate the stadium,” the statement read.

Edinburgh has no intention of paying any money. It claims that it is the one that is owed cash because the union has short-changed it in a payment last November and failed to pay the monthly instalment of its grant to the club on Tuesday.

With Bob Carruthers, the Edinburgh owner, also preparing writs claiming more than £12 million from the union for a series of alleged breach-es of contract, while the union is prepared to consider putting the club into administration, the quarrel has every chance of getting even uglier before it is settled. A threat from Carruthers to try to have the union declared insolvent, however, appears to have been withdrawn.

Back-room talks continue and one insider revealed yesterday: “Actually we are not that far apart. Financially we are talking similar amounts, it would be easy just to split the difference and settle. The big stumbling block at the moment is who would be responsible for the player contracts.”

The talks were confirmed last night by Gordon McKie, the union chief executive. “We have tried to reach an accommodation, not a process of mediation but certainly accommodation, to reach an end of the matter,” he said. “To date, despite our best efforts, we have been unsuccessful. We are still trying to resolve this matter professionally and confidentially because it needs to be brought to an end without the courtroom.

“We will review the position over the weekend and see what happens. If we choose to, we could move over the weekend. We want this to be brought to a conclusion quickly to allow the emphasis to go back to rugby rather than politics or a commercial dispute.”

With Scotland playing their first World Cup warm-up game against Ireland a week tomorrow and the professional club season imminent, there is increasing pressure to settle the dispute before it does any further damage.

“We would like two well-run, credible professional rugby teams in Scotland to continue during the 2007-08 season. If Edinburgh under Bob Carruthers’s ownership does not fit the bill, then we need to find a mechanism to have a second team that does,” McKie said.

“We currently give Carruthers £2 million a year. If we were to own that team, then you could probably work out that it would probably not cost much more than the amount we give it now. You have to look at all the guys who have left, the big names, Simon Taylor, Chris Paterson, Scott Murray and so on. I don’t know for sure but you could speculate that the payroll is not as big as it was when we sold it to him.”

As was revealed in The Times yesterday, Carruthers is now prepared to give up the fight. He says he has accepted that the union, whether its stance is right or wrong, holds all the power and that he is outgunned.

“If this were a purely commercial dispute, then we would withdraw all our players from the Scotland World Cup squad, but it is not and we won’t,” he said. “If we try to fight on, we will suffer the death of a thousand cuts.”

The doomsday scenario is that the unofficial talks will fail. If that happens, the union will probably apply to the courts to have Edinburgh wound up. Then not only would the club fight that case but lawyers acting for Carruthers, who is on holiday from today, will lodge up to seven separate claims against the union, including a £5 million allegation that it provided misleading or inaccurate management accounts when Carruthers was in talks about buying the club, and a £7 million claim for money that is due over the next four years under the agreement.