The proposals were unveiled in December, as part of a strategic plan to raise the quality of the club, academy and women's rugby. In detail, the Union said they would fund an elite level of clubs, using some contracted semi-professional players, and would also provide coaching support.
The move was inspired by poor displays by Scottish sides in the British and Irish Cup, where Gala, Stirling County and Edinburgh Accies suffered heavy defeats by better-funded clubs from England, Ireland and Wales, and recognition that Edinburgh and Glasgow - the Union's two pro sides - need a better feeder stream of talent.
A new league of eight top clubs, to be called the Scottish Super League, was to be established ahead of season 2015/16, governed directly by members of the SRU board and senior club representatives. In effect, those clubs would come under direct administration from the Union, creating a clear division between them and the country's purely amateur sides.
After a hostile reaction from other clubs, the SRU have now performed an embarrassing U-turn.
Officially, implementation has only been delayed until season 2016/17, but the fault lines the proposals have revealed suggest it may have to be shelved indefinitely. As in the 1990s, when there was a plan to create a professional district structure, it appears a fear of "player poaching" has been a major factor in resistance.
"Although many clubs accept and appreciate the need for increased quality at the top end of our amateur game there is concern the proposed model creates tensions lower down the leagues and the semi-professional level we recommend may result in a player drain from National and Championship clubs," said SRU chief executive Mark Dodson in a letter to Scottish clubs.
He said the Union's proposals to help women's rugby and the academy structure would go ahead.