The decision brings to an end three years of cross border activity which has brought benefits to both Unions.
However, the expansion of the Scottish District set-up coupled with the need to reduce the demands on the leading players were influencing factors in settling on this agreement.
It was felt that 22 league fixtures represented an unacceptable high figure, when combined with the other demands on players in a pre World Cup season.
Secretary of the Welsh Rugby Union Dennis Gethin said "A fully fledged Celtic League is of paramount importance and we are working towards achieving that goal. To avoid overplaying our top players and for administrative reasons, the forthcoming 2003 World Cup will delay its implementation. However we are confident that as soon as it is practicable, we will have in place a cross border competition of which we can be proud and which will enhance playing standards. We thank the Scots for three excellent seasons of competitive club rugby".
SRU Director of Rugby Jim Telfer said " When you consider that our top players will play 11 internationals next season and a minimum of seven Celtic League games and a minimum of six Heineken Cup matches, plus our own provincial competition, them we will be already around the optimum 30 games. We have to guard against player burn-out and that becomes an even more important issue as the 2003 Rugby world Cup looms"