Australian rugby league was today coming to terms with the one of the biggest scandals to ever hit the sport.

Melbourne Storm, who have dominated the National Rugby League for the last five years, were stripped of their 2007 and 2009 premiership titles after being found guilty of systematic salary-cap cheating to the value of more than £1million.

The NRL also took away the club’s three minor premierships from 2006-08 and ruled they will accumulate no competition points for the entire 2010 season.

The scandal was apparently uncovered by a tip-off from bookmakers who had taken a series of bets on Melbourne to finish the season with the wooden spoon.

In 2002 Canterbury Bull-dogs were fined £300,000 and docked 37 points, causing them to drop from the top of the table to the bottom, for breaching the salary cap by more than £600,000 in the previous two seasons.

The NRL have decided not to reallocate the 2007 and 2009 premierships to beaten finalists Manly and Parramatta and Leeds Rhinos say they will not be seeking to be awarded Melbourne’s 2010 World Club Challenge title.

The £600,000 the Storm earned in prize money will be distributed evenly between the other 15 NRL clubs while Leeds chief executive Gary Hethering-ton suggested the RFL should seek to claim the £50,000 winners’ prize from this year’s World Club Challenge for the Super League champions.

Melbourne coach Craig Bellamy said he was “heartbroken” by today’s revelation and chairman and chief executive of club owners News Limited, John Hartigan, spoke of his outrage.

NRL chief executive David Gallop called the cheating “elaborate” and “extraordinary”, revealing details of how the Storm kept two different sets of books to conceal the payment of players outside the cap.

Rivals fans had not only gazed in awe at Melbourne’s success but wondered how the club had managed to retain such a galaxy of international stars as Greg Inglis, Cameron Smith, Billy Slater, Cooper Cronk, Ryan Hoffman, Brett White and Adam Blair. Now they know.

“It was through this system that they were able to attract and retain some of the biggest names in rugby league,” said a clearly-shaken Gallop.

“In doing so they have let down the game, the players and the fans of the Melbourne Storm.

“Clearly there were some individuals who knew what was going on and perhaps many who did not.

“By nature, that means innocent parties will suffer as a result of this punishment but the persons responsible are those who constructed the scheme and anyone who knowingly signed a false statutory declaration to deceive the game.

“It would be unfair now on the players and fans of every other club in the competition to allow the Storm to enter this year’s finals series or to retain the titles they won.”

Melbourne chairman Dr Rob Moodie described today’s announced as the “lowest day in the club’s history”.

In a statement he said: “Melbourne Storm has today accepted the findings and outcomes of an NRL investigation into the club’s salary cap accounts.

“The rules are very clear and some former members of management have wrongly decided to break them.

“On behalf of the Melbourne Storm I would like to sincerely apologise to our players, our staff, our sponsors, our members and our supporters, and we will continue to assist the NRL with their investigation.”

Bellamy admitted news of the deception had come as a shock to him and his players but pledged to continue in his job.

“This is an absolute shock to myself, to our football staff, to our players,” he said. “Personally I am heartbroken.

“But this football club has great character and values. We will not walk away from this challenge. We will stick tight together as a group and fight our way back from this.”

Hartigan pointed the finger of suspicion at former Melbourne chief executive Brian Waldron, who ran the club from November 2004 to January this year when he quit to join Super 15 newcomers the Melbourne Rebels.

Waldron has refused to comment and is said to be taking advice.

Hartigan said: “Today is a regrettable day in the history of the game.

“I don’t think there will be a league fan anywhere who is not outraged by what appears to be a highly organised, deeply deceptive fraud in which there was systematic and deliberate concealment of unlawful payments to certain players over an extended period.”