England were kicked out of the Five Nations Championship last night. Unless a fresh round of negotiations succeeds in resolving the bitter dispute with Scotland, Ireland and Wales, Italy will be drafted in to replace England in the championship games which begin next month.

A day-long flurry of faxes from Twickenham to Allan Hosie, the Five Nations committee chairman, had failed to get the threat of England's exclusion lifted. Last night discussions were continuing among Five Nations committee members in an effort to find a way out of the impasse.

The midday deadline the committee had set for England ran out without the Rugby Football Union having given the unequivocal support the other unions wanted for the 10-year accord which underpins the championship.

"The deadline having passed, England ceased to be a member of the Five Nations committee and the championship," said Hosie in a prepared statement that indicated the massive gulf between England and the other unions. No direct communication took place between Hosie and Francis Baron, the RFU chief executive, until late afternoon, several hours after the deadline had expired.

In a terse response to England's exclusion from the tournament, which began in 1883, the RFU said: "The RFU has noted the announcement made by the chairman of the Five Nations committee this evening. Notwithstanding the announcement, we will continue our efforts to enter into dialogue with the committee. The RFU remains committed to the principle of the Five Nations Championship."

Solicitors acting for the Celtic unions believe that two letters the RFU faxed to Hosie were vague and equivocal on the issue of unconditional support for the 10-year accord, which spells out how much television money Twickenham must share with the other three nations.

Twickenham, they suggested, did not offer an acceptable solution to the dispute over Sky television money estimated at £30 million to £40 million, which the Celtic nations insist must be shared among the unions equally.

Earlier the stakes were raised further when Lloyds TSB, the Five Nations' main sponsor, announced it had written to the Five Nations committee expressing disapproval of England's exclusion.

Lloyds TSB said it desired, and expected, England to participate in the championship as a condition of its sponsorship. The decision to exclude England - they were also thrown out in the 1996-97 season but were reinstated - suggests the RFU will have to make major concessions to get back into the tournament for their opening game against Scotland at Twickenham on February 20th.

"It is essential not only for the game but also for the supporters, players, broadcasters and sponsors that we sit down and agree a way forward," Baron said.

If England stay out, all the unions involved will suffer substantial financial losses, given that Italy are unlikely to attract crowds much bigger than 20,000.

England, themselves, stand to lose about £15 million in gate and commercial revenue should their home games against Scotland and France fail to go ahead. Wales, scheduled to meet England at Wembley on April 4th, would struggle to cover the cost of renting out the stadium if they play host to the Italians.

Hosie, though, remained adamant that the conditions for England's participation in the championship had been spelled out clearly by his committee at last Friday's meeting in Dublin.

"As of midday today, the RFU had refused to confirm to the committee the continued validity of the accord and their willingness to accept it as the document governing the relationship between the five nations involved in the championship," he said. "Contrary to the announcement made by the RFU, the position had been made very clear to their senior elected representatives both verbally and in writing.

"Later this afternoon the RFU contacted the chairman of the Five Nations committee. As a result of these discussions, Allan Hosie will consult with the other unions to see if the position can now be resolved in the terms as initially requested by the committee."

Baron insisted the RFU had made a genuine attempt to negotiate a peace deal. "I have faxed two letters to Allan Hosie today supplying additional information and seeking clarification on certain questions.

"To date I have had no reply to my correspondence. Our position on the accord agreement remains the same as that set out in our statement issued on Saturday. We have again proposed a meeting to resolve all outstanding issues and hope that this is now taken up by the committee."