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Championship rugby clubs going into insolvency will face tougher sanctions as part of a crackdown by the Rugby Football Union (RFU) to prevent financial mismanagement in England's second-tier competition.

Last season three clubs – London Welsh, Birmingham-Solihull and relegated Coventry – all went into administration or liquidation only to re-emerge as phoenix companies.

Although the clubs were hit with substantial points deductions, there was widespread anger in the league that these sanctions did not apply to the relegation play-offs, effectively penalising clubs that had not spent beyond their means, reports the Daily Telegraph.

New regulations, however, will ensure any club that goes into insolvency will now be automatically demoted to the relegation play-offs. The club would then begin their six-match home and away series against the other three lowest-placed sides with a points deduction of 10 points, all but guaranteeing relegation.

From the start of the new season later this month, the RFU will also be able to instruct a representative to attend board meetings of any club it believes to be in financial trouble.

Clubs will have to produce business plans to the RFU by next June ahead of the start of the 2011/12 season.

"We want to keep clubs alive but we also have got to maintain the integrity of the competition in fairness to the other clubs," said Terry Burwell, RFU tournaments and competitions director.

"The hardliners will always say 'why don't you just relegate them [teams entering insolvency]' but that doesn't necessarily solve the problem. We are not in the business of putting clubs out of the business. We are in the business of trying to help clubs manage their business more effectively.

"We need to be able to try to steer clubs through difficult times because what we are trying to make sure is that we don't lose clubs during the course of the season.

"The clubs that got into trouble last season have more robust, rigorous and realistic financial planning but the question is whether they can manage their cost base sufficiently to ensure the direction of their club is not prejudiced."