The Welsh Rugby Union has welcomed the announcement that its four professional regions will operate under a salary cap from the start of the 2012-13 season.
Regional Rugby Wales, the umbrella body which represents the regions, revealed yesterday that the salary cap of £3.5m will cover the players registered for European competition by the Ospreys, Cardiff Blues, Scarlets and Newport Gwent Dragons.
The cap falls below the £4m currently allowed in the Aviva Premiership, and is dwarfed by the £7.1m maximum available to clubs in the French Top 14, although those caps include both development and academy costs.
With the likes of Toulouse, Toulon and Racing Metro reportedly able to offer players £500,000 salaries , the regions have had to accept they do not have the financial muscle to compete, and had called for the WRU to provide extra funding to help them keep their star names. James Hook, Mike Phillips and Lee Byrne already ply their trade in France, having left the Ospreys last summer.
But yesterday's agreement appears to take a stride in the opposite direction, removing the potential for dramatically increasing salary costs during the difficult economic climate.
Wales coach Warren Gatland has long stated his desire for national squad members to be based at home, and has warned those playing outside the Principality that their international futures are at stake if they cannot guarantee their release for all Wales squad sessions.