London Welsh have announced that they will go into liquidation due to a "totally unsustainable" financial situation.

The Championship club saw their latest hope of being saved fall through last month, leaving them with no option but to fold.

However, the 131-year-old club - one of the oldest in world rugby - hope to reform as a semi-professional outfit in 2017 and continue playing at Old Deer Park.

"London Welsh has reached a difficult point in its illustrious history. Due to a playing budget of £1.7m and gates at games numbering as low [as] 400, the club's current business model is totally unsustainable," read a statement from chairman Gareth Hawkins on the club's official website.

"The debts accrued from trading in this way have left the club with no alternative but to seek liquidation. Having to break that news to 40 staff members yesterday was extremely difficult. All creditors of London Welsh Rugby Club will be contacted by the liquidator.

"In the new year, it is the hope and intention of the board that London Welsh will be able to return to playing at Old Deer Park. However, it will first be necessary to change the club's business model to a semi-professional set-up and form a new company, and then raise £300,000 so that the club can regain a position within the RFU Greene King IPA Championship. Richmond have proved that a club can compete in the Championship with a semi-pro model, and I firmly believe we can make this work in 2017."

London Welsh competed in the Premiership in 2012-13 and 2014-15 but were relegated on both occasions, passing through the latter campaign without registering a single victory.

The club was founded in 1885 and has since contributed 177 players to the Wales national team and 43 players to the British and Irish Lions.