Wallabies star Folau posted anti-gay comments on his Instagram on Wednesday and declared that "hell awaits" homosexuals as well as drunks, adulterers, liars, fornicators, thieves, atheists and idolators.
If Folau successfully sued Rugby Australia for the millions of dollars remaining on his contract, it would be a serious blow for the already financially-stretched organisation.
What started as a rugby scandal in Australia exploded into a much wider and deeper issue yesterday, particularly in England, one which threatens the ideals and values that the game professes to stand by.
Rugby Australia stated they would be keeping the details of their discussion private and will update their respective Boards to consider next steps.
The rugby star has been laying low as backlash has grown over his Instagram post.
"It is important to note that Israel remains contracted to both Rugby Australia and the NSW Waratahs at this time, and as such has signalled his intention to continue to honour his contract", RUPA said.
Folau escaped sanction when he posted similar comments a year ago but RA took a much harder line when, having repeatedly warned him against it, the player repeated the offence.
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Israel Folau was shocked to learn his contract was in jeopardy following his latest social media outburst.
Opposition leader Bill Shorten said the bodies had made the correct decision.
"I think we're always conscious of it - with the last day and a half, [the message is] probably just to be more careful of what we're doing".
'We're on a slippery slope here.it's got nothing to do with Israel, or rugby, or religion, or homosexuals, or whatever.
"And after talking to some commissioners [on Thursday], we don't support him playing rugby league again". "Where are we in this country on free speech?" he said. "The game of rugby's bigger than all of its individuals and it moves on and you find different strengths and different things".
"Rugby is a sport that continuously works to unite people".
His best chances therefore lie offshore, although the chances of joining French club Toulon appear to be non-existent, with their outspoken owner Mourad Boudjellal criticising him in an interview in French newspaper L'Equipe.