St George Illawarra have abandoned a plan to seek NRL approval to sign dual international Israel Folau on a two-year deal.
Following 24 hours of intense focus and an extraordinary general meeting on Wednesday night, the Dragons released a statement to say they would not pursue Folau's return any further.
"While the Dragons did enquire about signing Folau, the club can confirm that such discussions have now ceased," the statement read.
The decision was communicated to former agent Wayne Beavis, who is acting on Folau's behalf, after a two-year offer believed to be worth around $1 million, had been discussed with the 31-year-old.
Revelations of the Dragons contract talks with Folau, ongoing for the past month, on Tuesday prompted backlash and debate around the merits of his return given the homophobic social media posts that ended his rugby career in Australia.
While the Dragons did enquire about signing Folau, the club can confirm that such discussions have now ceasedDragons statement
Having already raised the prospect of pursuing Folau with the NRL in writing, the Dragons were given further indication from the governing body on the process required in presenting a contract for the former Kangaroos and Maroons star.
With further detail and "having weighed the pros and cons of the move", according to club sources, the Dragons decided against pursuing their interest any further.
Folau's desire to return to the NRL was slated for discussion at an ARL Commission meeting on Thursday.
The Dragons’ interest in Folau is not the first time an NRL club has explored pursuing him since severing ties with Rugby Australia, with Wests Tigers also understood to have raised the prospect midway through last year before he re-signed with Super League outfit Catalans where the controversial former Wallaby made a return to rugby league last year.
Folau remains under contract with the French club but has been back in Australia recently with the club's permission on personal grounds.
Catalans have been bullish about St George Illawarra's talks with Folau and any suggestion of him not returning to the club.
CEO Bernard Guasch told French media outlet L'independent that no release would be entertained without financial compensation.
NRL.com understands a $200,000 transfer fee had been suggested to St George Illawarra before they opted against pursuing Folau's signature any further.
Panthers veteran Dean Whare is understood to be in the final stages of negotiations around a release to join Catalans. The deal for the former Kiwi international will potentially be completed by the weekend.
St George Illawarra’s decision to drop out of talks with Folau leaves them with around $400,000 in salary cap space for 2021.
Earlier on Thursday, Blues coach Brad Fittler claimed he was not across Folau's controversial stances he had undertaken on social media and said it would be up to the game's authorities to decide whether the former Storm and Broncos star should be allowed to return.
Folau reached a confidential settlement with Rugby Australia in 2019 after suing the governing body for religious discrimination.
Fittler weighs in on Folau debate
His multimillion-dollar rugby deal was terminated earlier that year over homophobic slurs on social media.
Folau's initial Catalans deal was reluctantly approved by the Super League as the English governing body had no legal grounds on which to deny the contract this time last year.
Speaking on Tuesday, NRL CEO Andrew Abdo said "due process will be followed and considered" with any bid for Folau to return.
"Any decision that you make, you need to think about the fans, you need to think about your investors and sponsors and all of that will be taken into account," Abdo said.
"But ultimately it's the NRL's decision."