Wallabies coach John Connolly is certain five-eighth Stephen Larkham won't be distracted by his latest contract drama to star at the Rugby World Cup.

Larkham is looking for a new team to see out the end of his glittering career after giving up on efforts to repair a shredded contract with Scottish club Edinburgh.

Larkham has terminated his two-year deal with Edinburgh after the Scottish Rugby Union took over the struggling club last month and repudiated the deal.

The SRU had told the 101-Test veteran they could not afford to pay him under the terms agreed earlier this year.

"As a result of Edinburgh Rugby's inability to perform the contract, and the SRU's refusal to accept the contract on the agreed terms, Stephen has been left with no alternative other than to terminate the contract with immediate effect," said his agent Jason Macarthur in a statement.

The news comes on the eve of Australia's World opener against Japan in Lyon on Saturday.

Larkham will retire from the international arena after the tournament in France and this week admitted he hoped to sort out his future quickly to prevent any distraction at the World Cup.

But Connolly dismissed concerns his state of limbo would impact on the Wallabies campaign.

"I'm sure he'll have a number of other options and speaking Japanese would be one of them I suspect," he said.

"Stephen and his manager are on top of that, and Stephen's comfortable."

The 33-year-old had been the centre of much speculation he might sign with Leeds or Toulouse after the Edinburgh deal was put in the hands of lawyers last week.

Japan now looms as the most likely venue for his new home.

Macarthur said Larkham held great disappointment in the breakdown due to "his eagerness to play in Scotland, and the steps taken to relocate his family".

"Despite the well-publicised dispute between the club's owners and the SRU, Stephen had remained fully committed to joining the club, until it became obvious that neither party was willing to honour the contract," Macarthur said.

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