The Cardiff-based club, who were in the Second Division in their first season this summer, were felt not to be ready for the Super League and were offered a First Division place for 1997.
South Wales have told the RFL, however, that it is the Super League or nothing and club representatives at yesterday's RFL Council meeting in Leeds were told that the Welshmen will not be competing at all.
The RFL chief executive, Maurice Lindsay, said: "They felt that people in South Wales want to watch the best or nothing. I'm personally disappointed, but they still have plans to apply for Super League for either 1998 or beyond."
The former Welsh rugby league international Mike Nicholas, the man behind the formation of South Wales, said: "The only way to make it work is to have the profile of Super League. It's not viable for us to play in the First Division. We were ready for Super League and we were given it only for it to be taken away from us."
The loss of South Wales will mean that 11 clubs will operate in the First and Second Divisions and they will have an extended season running from 1 March to 5 October to take in a new play-off.Reuse content