Australian Rugby Union (ARU) chief executive John O'Neill says South Africa's threat to defect to northern hemisphere competitions remains a bluff.

O'Neill's comments come as the Sanzar nations try to thrash out a Super rugby solution in Dublin this week.

After negotiations which O'Neill said had dragged on for almost a year, he will join New Zealand Rugby Union (NZRU) chief executive Steve Tew and South African officials on Friday in a bid to resolve the impasse which has left a proposed Super 15 in limbo.

Australia and New Zealand have discussed an alternative trans-Tasman competition for 2011, while South Africa says it intends to head north if its demands are not met.

"That's been a long-held bluff, in my view. From all the enquiries we've made, we believe there isn't an exit for them in the north," O'Neill told Sydney radio station 2KY on Monday.

"What has happened is Australia and New Zealand, out of pure frustration, have worked on a trans-Tasman competition which does work, with five or six teams from Australia and five or six from New Zealand.

"It's a Super 10 or Super 12, played over two rounds, and bringing in Japan in a couple of years time. It's a pretty elegant solution.

"The roles have changed in that we have a plan B and I'm not sure South Africa do."

A major sticking point remained South Africa's refusal to shift its domestic Currie Cup competition in the calendar, meaning Super rugby would start in February and cover a similar time frame to its current schedule.

Australia and New Zealand want the extended three-conference Super 15 competition to run from March to August, with the Tri-Nations tests to follow.

O'Neill also objected to South Africa pushing for a sixth team, which would play in the Australian conference.

He said the 15th team should come from Australia, with Melbourne and Gold Coast contenders, and there was potential for it to be a joint venture franchise with New Zealand.

"On a couple of occasions we thought we'd had an agreement but the South Africans have changed their minds. They're very unpredictable," O'Neill said.

"We don't want South Africa to drop out of Super rugby, we want them to stay in, but the conditions they're attaching to their participation are, in our view, unreasonable."

The Sanzar board meeting needs to come up with a 2011 competition proposal for a new broadcasting deal to News Ltd and SuperSport by June 30.

O'Neill said Australia was in the most competitive football market in the world, including the AFL, NRL and A-League, and a 24-week Super competition followed by Tri-Nations Tests was a "compelling product".

Meanwhile, he acknowledged the existing Australian Super rugby franchises were battling in the harsh economic climate.

"None of them are in robust financial health. They're all doing it pretty tough, none of it is fatal," said O'Neill.

"Western Force have already said they're going to lose $2.5 million this year, which is painful, I think the Waratahs, Brumbies and Reds will be at break-even or a little bit worse off but we're keeping a close eye on all of them.

"The importance of making semis brings it into sharp focus at this end of the season.

He noted Football Federation Australia had taken over the licenses of their teams in Brisbane and Adelaide.

"It's the toughest market I've seen for sport, and I've been in either rugby or football since 1995.

"Sponsorship, corporate hospitality, all the things in good economic times people are knocking your door down, it's just not happening.

"And I think for rugby league, AFL, ourselves, football, they're all going to have be very careful the next couple of years that we don't delude ourselves about the reality of these economic circumstances."

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