New Zealand withdraw as World Cup co-hosts

Next year's World Cup was confirmed as this year's political football yesterday when New Zealand, barely on speaking terms with their Wallaby neighbours and deeply concerned by the financial implications of co-hosting the 2003 tournament under the strict conditions imposed by the organisers, effectively handed the entire competition over to Australia.

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Showpiece degenerates into greedy shambles

Next year's World Cup was confirmed as this year's political football yesterday when New Zealand, barely on speaking terms with their Wallaby neighbours and deeply concerned by the financial implications of co-hosting the 2003 tournament under the strict conditions imposed by the organisers, effectively handed the entire competition over to Australia. The Australians now have three weeks to pitch for all 48 matches, and are in such buoyant mood following the success of the 2000 Olympics that they may submit a formal bid within days.

The proposed cross-Tasman arrangement had been in trouble for weeks, and the breakdown in relations between the two unions forced the Rugby World Cup and International Rugby Board officials into a humiliating abandonment of next week's tournament launch in Sydney. As ever, money was the stumbling block. The New Zealanders refused to accept demands that local stadium advertising agreements should be waived for the duration of the competition, and were unhappy that the Australians had secured the biggest commercial fish, England and South Africa, for themselves.

"New Zealand went into this knowing certain terms and conditions were not negotiable," said John O'Neill, the chief executive of the Australian Rugby Union, who has a reputation for playing hard-ball in the boardroom. "They want to make changes and amendments to the agreement, but there is no time now for further negotiations. It's over."

O'Neill added: "I am confident that from the logistical, infrastructure and financial perspectives, we will put together a compelling proposal."

While the New Zealanders were making noises about raising the issue with the IRB executive – "We are not prepared to commit to something we know we cannot deliver, or to mortgage our future at the whim of the RWC board," said Murray McCaw, the NZRFU chairman – the chances of them resurrecting the sub-host deal on terms more acceptable to themselves are virtually non-existent. "The proximity of the tournament leaves us no alternative but to move forward as quickly as possible," said Chris Rea, the IRB's communications manager. "This step has been forced on us by the NZRFU's failure to conform to, or accept, its obligations."

After the serious row over the expansion of the Super 12 tournament – a move blocked by the New Zealanders – there is no love lost between the Antipodean rugby communities. This summer's Bledisloe Cup matches should be real fun.