The Australian Rugby Union have dealt a crippling blow to their national women's team that will effectively ground the side for the next two years.

The ARU, who will host the men's World Cup next year and expect to make around A$45m profit, have cut their funding to the women's game by A$200,000.

The Australian Rugby Union's high performance unit has told Wallaroos coach Don Parry and manager Stephen Swan, whose contracts ran out this year, there would be no funding for the next two years.

This would ruin chances of an Australian team competing at the seventh women's World Cup in 2006 and force the cancellation of tours by Canada and the US next year.

"Certainly, if the team goes into hiatus for two years I don't see how it can come back and competitively prepare for 2006," Swan told The Australian.

Former Wallaroo Bronnie McIntosh, who retired in June after 13 Tests and 12 years' playing, said the funding cut would "totally kill" the women's game in this country.

"There'd be no tours, no development, no publicity and with us hosting the men's World Cup that would have been a perfect opportunity to showcase our game," McIntosh said.

ARU media and communications manager Strath Gordon said there were 1200 women players compared with 136,000 registered male players.

"There has been a longstanding feeling at the ARU that funding to make the women's game grow would be better directed at the grassroots level of the game rather than at the so-called 'elite' which sits on top of a very minimal participation," Gordon said.

"Basically it is a philosophical debate because no-one doubts the dedication of the women players."

The Wallaroos were formed in 1994 and have played 17 Tests and competed in the past two World Cups (Amsterdam 1998, Barcelona 2002).

They came under the high performance unit's umbrella in 2000, partly to prepare them better for this year's World Cup.

The Wallaroos, with support from then high performance unit manager Jeff Miller, put forward a budget to the ARU for a pre-World Cup tour to New Zealand as well as the costs of Barcelona. The figure was $440,000 but Swan said the ARU board would only approve $190,000.

The tour to New Zealand, the world champions, was scrapped and a training camp in February was paid for entirely by the players.

It appears the wavering support for the Wallaroos began before the Barcelona tournament when Swan said there was a push to try to call the tour off due to costs.

"My understanding is that the IRB indicated to the ARU that that would not be a wise thing to do for a country that still, at that stage, had not signed the host city agreement for (the men's World Cup in) 2003," he said.

Women's rugby has not been lost to the ARU but it has been downgraded and placed in the ARU's community rugby unit where juniors and school development programs reside.

Swan rued the fact the ARU would make a sizeable profit from hosting next year's World Cup yet could not make $400,000 available over the next 24 months to get the Wallaroos to their cup in 2006.

"It makes me angry and also when I look at the USA, Canada, England, and even Wales who are setting up the proper infrastructure for women's rugby," he said.

"South Africa has got right behind women's rugby and is financing a nationwide provincial competition and New Zealand have a strong women's set-up."

McIntosh said what the Wallaroos needed in funding was "just a drop in the ocean" of what the ARU could provide with better management of current resources.

"We could operate on a smaller budget than $200,000," she said.