Worcester Warriors have withdrawn their proposal to play in the Championship next season and will rebrand as Sixways Rugby, says owners Atlas.

But Jim O'Toole, who led the Atlas takeover alongside James Sandford, said they have pulled out of talks.

"There were a number of key clauses in the contract that we couldn't sign," O'Toole told BBC Hereford & Worcester.

"We and the investors couldn't accept them as they were too onerous. It would have given the RFU control over decisions that we as a business will have to take.

"This decision will clearly upset and annoy a number of people. The sad fact of life is that the Worcester Warriors brand and the Worcester Warriors business is gone.

"We didn't want to go down to the 10th tier as Worcester Warriors, so the name sadly will disappear. We are rebranding as Sixways Rugby. We're starting afresh. We believe it is time for a new start. The church has closed down."

BBC Sport have contacted the RFU for their response. They would need to approve any name change, as well as confirming that O'Toole and Sandford have passed the owners' test.

The RFU are understood to be meeting this week with the Department for Digital, Culture, Media and Sport over the ongoing debate over the future of professional rugby in Worcester.

Worcester were suspended from the Premiership in September after going into administration, with the club being relegated and the players having their contracts terminated the following month.

Former director of rugby Steve Diamond headed up one consortium looking to take over Worcester, but it was O'Toole and Sandford's Atlas group who were made preferred bidders by administrators Begbies Traynor.

Atlas were confirmed as Warriors owners at the start of the month.

What next for Sixways?

There remains widespread speculation that Worcester's Midlands rivals and fellow relegated former Premiership side Wasps could move to Sixways next season.

O'Toole described talk of a merger as "a non-starter", while Wasps, previously linked with a move to Solihull Moors' Damson Park, said they were still in talks with two potential landlords, both based in the Midlands.

Wasps said in a statement: "Wasps are working around the clock to meet RFU requirements and deadlines so that we can compete in the Championship for the 2023-24 season.

"We are making very positive headway on all key criteria and are confident of meeting Tuesday's deadline. We have been in constant communication with the RFU and kept them informed of our progress."

Instead, the new Worcester club will ally with fourth-tier side Stourbridge, who ex-Warriors chief executive O'Toole says will play at Sixways, with a target of reaching the Championship by 2026.

The future at Sixways of Worcester's women's side and local football team Worcester Raiders, who currently share the artificial Sixways surface, is now also in doubt.

"Worcester Warriors (women) and Worcester Raiders will see out the season at Sixways," added O'Toole. "But we believe we need another tenant and are in talks."

From Stourton Park to Sixways?

Semi-professional club Stourbridge, whose Stourton Park home is 23 miles up the M5 from Sixways, are currently bottom of National League Division Two West, having won just once in 18 games this season - and are under serious threat of relegation.

"We will invest the maximum we can within the RFU regulations to get the club through the leagues to get to the Championship by 2026," added O'Toole.

"They'll in effect become our first team in our journey to returning to top level rugby. They will play at Sixways from the start of next season.

"We'll be sustainable, not reckless. The ultimate goal is to get back to the Premiership but the gut feeling is that it will be ring-fenced."

Stourbridge confirmed the Sixways tie-up in a letter to their members.

"These discussions have been ongoing following the successful appointment of Atlas Group as the new owners of Sixways," Stourbridge said.

"Both respective committees' representatives have met with a view to Atlas supporting Stourbridge commercially not only at first XV level, with Stourbridge remaining firmly a member's owned club.

"Atlas Group is proposing a long-term investment into our playing infrastructure to enable our teams to play competitively at all levels, to grow our club to becoming a Championship level club (and beyond) to provide a pathway to senior competitive rugby at all levels in the men's and women's game."

Stourbridge also told their members: "The proposals being put forward can only be agreed upon following the full consultation and consent of Stourbridge Rugby Club membership at a proposed SGM where full proposals and outlines will be provided with adequate time for the club to fully consider the proposals."

Analysis - 'This not a done deal'

BBC rugby correspondent Chris Jones

While Atlas say they will partner with Stourbridge, become Sixways Rugby, and play at Sixways, it is not a done deal.

Any tie-up with Stourbridge will need to be approved by their members. The club is holding a Special General Meeting on Friday night.

Interestingly, in the letter sent to Stourbridge members there is no mention of the club moving to Sixways as Atlas suggest in their exclusive interview with BBC Hereford & Worcester.

There is also anger from former Warriors employees that this latest development will mean the millions of pounds owed to rugby creditors will go unpaid.

One former member of management has branded it "absolutely disgusting". Supporters will also be devastated that their beloved club won't be coming back.

It's also understood any name change would need to be approved by the RFU, who have been contacted for their response.

Atlas co-owner Jim O'Toole was talking to BBC Hereford & Worcester's Andrew Easton