The Scottish Rugby Union have regained control of Edinburgh Rugby and reached an agreement with the former franchise owners which staves off the threat of legal action from either side.

The termination of the franchise arrangement brings to an end a bitter dispute between the two organisations, which began with Edinburgh claiming they were due a substantial six-figure sum from the SRU in match fees.

It escalated when Edinburgh withdrew 12 internationals from Scotland training, and was followed with threats of legal action from both parties, while the Magners League club were told they must leave Murrayfield and find a new home.

A statement from the SRU confirmed: "Scottish Rugby and Edinburgh Rugby have announced today that they have reached an agreement over the future of the capital's professional team, which will return to Scottish Rugby's ownership.

"With immediate effect, Scottish Rugby's agreements with Edinburgh Rugby Limited and its holding company, Murrayfield Sport and Leisure Limited have been terminated by mutual consent.

"Both Scottish Rugby and Edinburgh Rugby have agreed to drop all claims against each other and, also with immediate effect, Scottish Rugby will be responsible once more for professional rugby in the capital.

"Scottish Rugby will now establish a new professional team to replace Edinburgh Rugby, which will include all existing players and the majority of the management and backroom staff."

Edinburgh coach Lyn Howells will be replaced. The new coach, on an interim basis, will be SRU head of player development Henry Edwards.