Where will the 2015 and 2019 Rugby World Cup tournament be held? © IRB

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The International Rugby Board has been warned there is a "serious risk" of the global game "going backwards" if the 2011 World Cup in New Zealand is a commercial failure.

Tournament organisers are expecting to make a 30 million New Zealand dollars (£10.7million) loss on the event and the authors of hard-hitting report 'Putting Rugby First' fear the knock-on effects could be serious. The report, originally published in July, criticised the IRB for failing to maximise rugby's commercial potential and insisted a developing nation must be awarded the World Cup.

The IRB dismissed the report as "deeply flawed" - but co-author Quentin Smith has written back to chairman Bernard Lapasset and questioned the governing body's position on the World Cup. He wrote: "Might the scheduled losses for New Zealand in 2011 be considered a disaster for that region? It certainly could be for the game. "If the event is not a commercial success, raising increased revenue to support developing needs, Olympic ambition and inflation, there must be a serious risk of rugby going backwards.

"Publicly reported tension between the IRB and the host nation on, for example venues, is very worrying. Where would responsibility lie?"

The IRB will announce the hosts of both the 2015 and 2019 World Cups in July next year in the hope it will increase the chances of a non-traditional country being awarded the tournament. Nine nations have registered their interest but only Italy, Japan and Russia are non-established rugby nations.

Smith has called on the IRB to provide "clear leadership" to ensure the tournament does indeed go to a developing nation. But there are concerns that the same voting system which saw the 2011 tournament awarded to New Zealand over Japan is still in place.

Smith wrote: "Does the IRB have a view on the desirability of taking the RWC to a new territory as a means of building the game's global footprint or not? If yes, what concrete steps are in place to bring this about? There surely needs to be clear leadership from the IRB to the intention you describe when the eight bidders for 2015 comprise six foundation unions plus Italy and Japan and in 2019 they are the same countries plus Russia but without England.

"New Zealand, a 'traditional territory', is already scheduling a loss of 30 million dollars. Why will a two-cycle approach make a difference when separate, minimum, guarantees are required? Why not aggregate the financial target across the two events?"

The original 'Putting Rugby First' report stated the IRB must award the 2015 tournament to a developing nation if they are serious about breaking out of an English "ghetto" and establishing the sport as a truly global game. The report accused the IRB of being "unrepresentative and undemocratic" and of lagging behind sports like cricket in expanding into new lucrative markets.

They came up with six key proposals, which included reforming the IRB's structure and improving its corporate governance.

In September, the IRB answered many of the criticisms levelled at them in the report and defended their performance. Smith has written back to Lapasset, addressing what he described as a series of "glaring misrepresentations".

He stated: "We do not seek to undermine the IRB but wish to see it soar with justifiable authority for the recognised benefit of all. We believe that it can lead with credibility and integrity but that changes are necessary to ensure confidence and trust.

"The greatest challenge is the ability to recognise the need for improvement and the courage to act especially when it might be contrary to an individual's, or their nation's, narrow interests for the greater good."