A BITTER feud has broken out among England's leading 24 clubs over the distribution of RFU money from television, sponsorship agreements and other commercial sources next season. The top four clubs want to share a total of £6 million, leaving the remaining six clubs in Courage League One with £800,000 each and those in League Two with £200,000 each.

The union fears the top clubs want the lion's share of income in order to step up their purchase of non England qualified players and turn domestic competitions into a European melting pot. Clubs in the bottom half of League One as well as the 12 League Two clubs believe they could swiftly become the permanent poor relations of English rugby.

This week a meeting of the clubs broke up after hours of wrangling without any firm compromise having been reached over next season's cash shareout. Club representatives were also unable to agree a fair and democratic system for appointing the six directors they are entitled to on the new joint company to be set up with the RFU.

The elite clubs within League One - Leicester, Bath, Harlequins and Wasps - are determined to exercise the maximum amount of muscle on the board of the new company which will include two RFU directors with a right of veto in specified areas. However, members of English First Division Rugby Limited are seeking an equitable distribution of power broadly representative of all the clubs.

Twickenham has a long term plan to offer the top clubs cash - incentives to select England qualified players for League and Cup matches without contravening EC employment laws. But the amount of money the RFU can invest in the plan falls well short of the potential purchasing power of the elite clubs in the European transfer market. The chances are the RFU incentives would only appeal to poorer clubs.

As one RFU spokesman put it: "Ultimately the financial value of English rugby at international level is at stake. If the clubs fail to make their own contribution to the flagship of the game - which is the England team - they are in real danger of becoming also rans in Test rugby by the end of the 1990s. A flood of foreign imports could produce a competitive nightmare for the England coach and his staff."