Interim Welsh Rugby Union chief executive Nigel Walker says rugby bosses had no choice but to slash player wages and reset the game's finances.
Walker told a group of MPs the "uncomfortable" situation has arisen because the game's administrators in Wales "got carried away", leading to player salaries spiralling out of control.
He said without the deep cuts that have been brought in, Wales would be facing the same situation as England, where three teams, Wasps, Worcester and London Irish, have gone bust this season.
