The French national league (LNR) is set to confirm at a board meeting tomorrow that the nation's clubs will withdraw from European competition next season.
England's 12 top-flight clubs have also voted to withdraw from Europe's top competition if their French counterparts carry out a threat to boycott the tournament, leaving the competition teetering on the brink of collapse.
"Once the English teams said they would join the French in a boycott, the only response our respective unions could offer was to warn them of legal action. A settlement through negotiation now appears impossible," LNR sources said today.
LNR chairman Serge Blanco told sports daily L'Equipe a withdrawal by both French and English clubs would probably kill off the Heineken Cup as the two countries have provided nine of the 11 winners of the competition since it began in 1995.
"We'll spend a year without European competition. Then we'll try to think up something else," the former international fullback added. "I find it regrettable that a competition as great as this is being sacrificed and that the RFU is not making an effort to match our reasonable demands."
The LNR board meeting will take place tomorrow in an hotel close to Paris-Orly Airport.
In January, the French clubs were first to announce they would not take part in European competition next season for strategic and financial reasons.
At the time, Blanco said the conflict centred on the RFU's refusal to abide by an agreement to hand England's top clubs 50 per cent of their shares and voting rights in the European Rugby Cup (ERC).
However, RFU director of elite rugby Rob Andrew has accused the French clubs of being duplicitous.
"This dispute is really about the fact the French clubs decided there were too many matches in a World Cup year and they felt the Heineken Cup was something they couldn't accommodate," he said.
"The English clubs have become embroiled in that and the share issue has been brought into the debate as well. It has become very untidy."