Newcastle Falcons are in danger of going into meltdown following the departure of four key players, with England international backs Toby Flood and Mathew Tait being offloaded to Leicester and Sale, Ben Woods, their highly-rated England Saxons openside flanker, joining Flood at Welford Road, and promising scrum-half Lee Dickson signing for Northampton.

The four are known to have been unhappy at the decision by Dave Thompson, the Newcastle chairman, to sack director of rugby John Fletcher in March – replacing him with Steve Bates, the England Saxons and former Borders coach – all of them having been mentored by Fletcher when he was the club’s academy coach.

Flood, 22, who won the first of his 17 caps in 2006, described Fletcher’s dismissal as the worst week of his career and alleged the axe had been deliberately wielded during a Six Nations week while he, Tait, Jonny Wilkinson and Jamie Noon were away on England duty. However, while Flood’s decision to move had been anticipated, the decision to part with Tait, who scored a try against Ireland on his 23rd appearance for England only a few weeks ago, will come as a surprise to Falcons supporters, especially given a dismal season with the club currently 11th in the Guinness Premiership, and an unforgiving run-in starting against playoff challengers Leicester today.

The upshot is that Newcastle, despite still being able to field two of the biggest names in world rugby in fly-half Wilkinson and New Zealand prop Carl Hayman, are already being billed as next season’s relegation favourites, with Wilkinson, used to orchestrating a star-studded back-line, having to make do, Noon excepted, with journeymen outside him. Nor will England’s 2003 World Cup-win-ning hero be happy with the exit of Woods, 25, who is the only genuine ball-winning No 7 in the Newcastle squad, and an essential component in securing quick ball.

The official line from Thompson for releasing Tait, Flood and Woods with a year to run on each of their contracts is that their England duties are disruptive to the club: “Having four of our first-choice back-line away with England for so long this year, and the fact that they would miss half of our league games next season, has been a major consideration in the decision to allow both Toby and Mathew to move. The impact of four of our back-line going out en masse and then returning at various stages of the season has caused us certain difficulties as we look to get this team to where it needs to be.”

However, the underpinning factor is money. As the club’s owner, Thompson is looking to trim £500,000 from his wage bill having sold its main asset, the Kingston Park ground and conference centre, to Northern Rock for just under £15m last summer under a leaseback arrangement three weeks before the near collapse of the Tyneside bank. With the club already deeply in the red, Thompson found the interest payments on an initial loan to the Falcons from the bank for a similar amount to be prohibitive.

By clawing back £200,000 in transfer fees off Leicester for Flood (£140,000) and Sale for Tait (£60,000), and saving £300,000 in wages – the young England stars were on £150,000 annual contracts – Thompson has gone a long way to meeting his target. It is also highly unlikely, despite Thompson’s announcement, that he will be signing Super 14 talent to plug the gaps, that he will be breaking the bank to sign any more Alist internationals like Hayman.

The two southern hemisphere players Newcastle are known to be interested in are hardly box-office. They are hoping to sign Tane Tuipulotu, a 26-year-old centre from the Hurricanes in New Zealand who has understudied Tana Umaga and Ma’a Nonu, and Cobus Grobler, a lock from the perennially struggling Lions franchise in South Africa.

One agent suggested that they had entered the market place late in the day for next season. “They may struggle for quality provincial signings from the Super 14 because most of those out of contract have already made their move.” A case in point is the All Black flanker Craig Newby, who spent a season with the Falcons in 2002-03. The Highlanders and Otago captain has already been snapped up by Leicester.

Martyn Thomas, the chairman of the RFU Management Board, said he has grave misgivings about Newcastle’s current position. “We have to make sure rugby union remains in the northeast, and I am deeply concerned that these players have been lost to Newcastle given the new compensation deal that the RFU has done with the clubs for England players, which starts on July 1.”

The Newcastle cost-cutting exercise began in earnest when Newcastle parted company with fitness coach Steve Black in December. Black had established a very close working relationship with Wilkinson over the course of a decade. Wilkinson had said of Black: “I trust him with everything. He’s the driving force behind my ambitions. Much of my confidence and self-belief comes from my respect and belief in him.”

It was expected that Black’s sacking would finally prompt Wilkinson into leaving the Falcons after a decade with the club, but he confounded the forecasts by renewing his contract for a further two years soon after the fitness guru’s departure, although at a reduced salary of around £200,000.