The reduction is made in agreement with the RFU in light of disappointing rugby union participation figures shown in the Active People Survey over the last couple of years and a recognition by the RFU that it will not achieve the participation growth commissioned through Sport England's 2009-2013 investment.

Sport England's Active People Survey shows that the number of adults playing rugby union at least once a week has declined from 230,000 at the start of this funding period to 177,900 at the latest update.

Sport England chief executive Jennie Price said: "The decision to reduce funding to the RFU was not taken lightly but Sport England has been clear that failure to achieve the agreed growth in its sport would lead to a governing body's overall funding levels being reviewed.

"I am glad that the RFU has acknowledged that the challenge for rugby union is to stop the decline in participation and to inspire new and former players to get out on the pitch enjoying this great game in all its forms.

"We strongly support the approach being taken by the new leadership team at the RFU and the priority now being given to the grassroots game.

"Our discussions with the RFU have given us confidence that the very significant investment we are still making in rugby union will deliver value for money."

The RFU plans to recover from the disappointing performance of 2009 and 2010 by giving greater focus on all four forms of the game – 15-a-side, sevens, tag and touch.

There will also be more focus on improving the quality of rugby players' experience of the sport at all levels.

RFU chief executive John Steele said: "We have to accept that the failure to meet our Sport England targets over the last few years would inevitably affect the level of funding we receive.

"However, I now believe we have far more realistic targets for the next two years and we are committed to creating a sound platform for growth as we move towards the home World Cup in 2015."

The RFU/RFUW's maximum funding award for 2009-2013 was £30.72 million ($50.39 million), consisting of £18.82 million ($30.87 million) revenue funding and £11.9 million ($19.5 million) capital funding, but as a result of reductions to Sport England's Exchequer funding in the Comprehensive Spending Review, the RFU/RFUW's capital award has already been reduced to £10.54 million ($17.28 million).

Around £8 million ($13 million) of Sport England's four-year investment is going into women's rugby, with £3.6 million ($5.9 million) dedicated to supporting England's elite squad and developing the next generation of women rugby players after the England women's team reached the final of the Rugby World Cup last September.

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