The dispute between Edinburgh and the Scottish Rugby Union reached a dangerous level yesterday when the club were thrown out of their Murrayfield base and ordered to repay an advance of €2.1 million by this afternoon.

The Edinburgh owner, Bob Carruthers, responded by saying the SRU was in breach of contract and he was preparing for a counter-claim of €10.4 million. He maintained he had a tenancy agreement with the union and the sole rights to operate professional club rugby within a 10-mile radius of Edinburgh.

Carruthers and the SRU have been in conflict for much of the time since the music and film impresario took over Edinburgh last year. What started as a dispute over bar profits at Murrayfield from an Edinburgh match deteriorated this summer when the club held back their players from a national squad training session in protest at an alleged non-payment of participation money worth €371,000.

Edinburgh's associated membership of the SRU was terminated by Carruthers and the union responded by threatening the club would not play in the Heineken European Cup or Magners Celtic League next season, a threat that was lifted. However, when a number of Edinburgh's Scotland internationals, including national captain Chris Paterson, were allowed to leave for England or France, the governing body decided to take action.

The SRU originally sold Edinburgh because of the union's €34.2 million debt. Their chief executive, Gordon McKie, yesterday denied that by making Edinburgh homeless and demanding the return of €2.1 million the union was, after closing Borders in May, looking to have only one professional club in Scotland next season.

"Getting Edinburgh Rugby back has never been our agenda," said McKie. "But Edinburgh's rugby team is rapidly falling into disarray and we want to see two competitive teams in Scotland. Our motive is to ensure Edinburgh Rugby continue. We have tried to deal with this in a dignified manner . . . but the longer this goes on the more damage it does to the club."

Carruthers said the SRU was trying to force him out, but added: "I am standing firm. The union is saying it will give us money if we liquidate the club, but that would put players on the dole and we are not prepared to do that. We will be enforcing a tenancy agreement . . ."

The Scotland coach, Frank Hadden, said the row was not having a negative impact on World Cup preparations, but Edinburgh scrumhalf Mike Blair admitted the issue was being discussed by the squad players. "We just hope it has blown over by the time the World Cup ends," he said.

The Australia squad is also beset by strife, with players reportedly dissatisfied with some of the management team. The Australian Rugby Union has lined up the Canterbury Crusaders and former New Zealand coach, Robbie Deans, to take over at the end of the year, possibly assisted by another New Zealander, Warren Gatland. Pat Howard was yesterday appointed manager of the ARU's high performance unit.

Guardian Service