The Welsh Rugby Union has decided to reduce the number of professional clubs in Wales to three, WalesOnline has learnt. We understand the WRU board has agreed that reducing the number of professional clubs is the best way forward, with the process set to begin this summer. As part of the WRU's One Wales strategy the initial plan was to retain four clubs - Cardiff , Dragons, Ospreys and Scarlets - under a new Professional Rugby Agreement which was meant to lead to increased funding and a refinancing of the debt acquired during Covid. WRU CEO Abi Tierney and chair Richard Collier-Keywood have always maintained their desire to retain four clubs but things have changed dramatically. Primarily, the WRU's decision to take ownership of Cardiff Rugby following the capital city club entering administration has altered the landscape significantly. While the Dragons have signed the new PRA, both the Ospreys and Scarlets refused to do so over fears the WRU would turn Cardiff into a super club. The WRU and the two west Wales clubs have been locked in negotiations for the past couple of weeks but have not been able to get a deal over the line. WalesOnline has been told the WRU have activated the two-year notice on the old PRA because it is desperate to refinance its debt. Sign up to Inside Welsh rugby on Substack to get exclusive news stories and insight from behind the scenes in Welsh rugby. NatWest view the old PRA as too much of a risk to refinance the debt because any increase in the WRU's profit has to go to the four professional clubs, whereas it doesn't on the new deal. The WRU is looking to take on around £35m of new debt which would refinance its existing NatWest and Welsh Government facilities of £30m. There is Welsh Government debt of £12.5m which was passed through to the clubs via the WRU. But despite saying there was enough money in the new PRA to fund four strong professional sides, it appears the view is that is no longer be the case. It has been apparent for quite some time that Wales does not have the finances nor the sufficient volume of high-end professional players to service four clubs. Get the latest breaking Welsh rugby news stories sent straight to your inbox with our FREE daily newsletter. Sign up here. All four professional clubs have struggled to compete with the better sides in the United Rugby Championship and Europe, while the Dragons finished bottom of the table having won just one league game all season. The WRU has decided enough is enough and want to create a structure which is financially viable and allows the game in Wales to not only survive but thrive. Cutting to three professional clubs could be seen as an ambitious move to concentrate talent and resources which should in theory improve standards across the board. Despite a two-year notice getting served, the likelihood is a change will happen sooner than that. Join WalesOnline Rugby's WhatsApp Channel here to get the breaking news sent straight to your phone for free One option would be to put the licences out to tender after setting some strict criteria based on things like stadium, facilities, investors and players produced for Wales, among other things. The second option would be for two clubs to merge voluntarily or for another to fall on its sword. One thing which is certain is that seismic change is coming to Welsh rugby, not seen since the inception of regional rugby in 2003.