A bid to resolve a bitter standoff in the troubled domestic A-League between the Newcastle Jets and Football Federation Australia broke down Friday, setting the scene for legal action.
Billionaire coal tycoon Nathan Tinkler's Hunter Sports Group (HSG), which runs the Jets, said it had decided to stand firm on an earlier decision to hand back its licence due to an "irrevocable breakdown in confidence" in FFA.
The group said it would "welcome and look forward to any forthcoming legal action".
The FFA says it does not accept that the Jets have the right to return their licence and expects the team to honour their 10-year playing contract through to 2020.
In a statement, HSG claimed it had offered a peace deal to FFA.
The proposed terms included a review by the FFA of a reported Aus$4.5 million (US$4.6 million) fee paid by HSG for the acquisition of the club's licence in 2010, which HSG has subsequently said was too high.
HSG added that it would also invest Aus$250,000 on behalf of all clubs and the FFA to create an independent taskforce to make recommendations on improving the sustainability and transparency of the league.
FFA chief executive Ben Buckley said no such proposals had been submitted.
"HSG embarked on a unilateral breach of contract in the first instance and has given FFA no opportunity to have a face-to-face meeting," he said in a statement.
"We are disappointed that no talks have taken place to resolve our differences.
"FFA reaffirms its position that it does not accept that HSG has the right to return the A-League licence."
The development piles on the woes for the troubled A-League, which has struggled to attract crowds and laboured under financial issues.
Gold Coast United were kicked out of the 10-team competition in February after the FFA had a furious row with the club's owner, billionaire mining magnate Clive Palmer. The decision will take effect from the end of the season.