The Board of Control for Cricket in Sri Lanka was unable to secure completed World Cup player contracts on Sunday after missing a Friday deadline set by the ICC, which has already faced a long-running contract dispute with India.
The BCCSL said it could not meet a player demand for 20 per cent of the revenue from the World Cup, and was instead offering the players 10 per cent of revenue plus a match incentive fee.
"The BCCSL is unable to meet this demand because it is unreasonable and is not based on performance," it said in a statement.
"It will seriously undermine the board's ability to meet its obligations vis-a-vis the developmental activities for domestic cricket.
"The BCCSL ... has urged the squad members to act reasonably in the larger interests of Sri Lankan cricket and finalise the contracts immediately.
"However, in the event that the squad members fail to do so, the BCCSL will be reluctantly compelled to avail itself of all remedies available to it."
"SERIOUS CONTRACTS"
On Thursday, ICC chief executive Malcolm Speed warned that failure to return the tournament contracts by the following day would have "very serious consequences" for the BCCSL.
Sri Lanka's cricket team is currently playing in a triangular one-day series in Australia.
The dispute between the Sri Lankan cricket board and its players has not been as complicated for the ICC to handle as the protracted sponsorship row which has threatened India's participation in the World Cup.
While Sri Lanka has tried to resolve its dispute directly with its own players, Board of Control for Cricket in India chief Jagmohan Dalmiya has supported his own players in opposing a World Cup contract to which he signed in March.
The sponsorship issue dates back several months and almost led to an Indian player boycott of the Champions Trophy limited-overs tournament in September.
The ICC, in trying to protect its official event sponsors from 'ambush marketing', ordered players to freeze their advertising contracts with rival companies.
India's top players, who earn far more from advertising than from playing, rebelled, arguing they were not consulted and that the ICC had no right to sell their image rights. Their stance won the backing of other players around the world.
REBELLION QUELLED
The ICC offered a series of compromises which quelled the rebellion and ensured that all teams took part in the Champions Trophy.
The same issue, however, flared up again in India, where the Indian board's shifting position created further confusion.
Indian players eventually signed a participation contract on January 11, but doubts remain about whether they will play in next month's World Cup.
India's endorsement-rich players are opposing the ambush marketing and player images clauses in the participation terms, which arise from a $550 million rights deal signed by the ICC for its events up to 2007.
The ICC has offered to ease some of the conditions and has warned that the BCCI would be in breach of contract and liable to a compensation claim if it failed to send its best players to the event, mainly being played in South Africa.
The dispute could yet end up in the Lausanne-based Court of Arbitration for Sport (CAS), an independent body set up to rule on sporting issues, for a binding ruling.
The World Cup, involving 14 teams, is due to be officially launched on Feb 8 and runs until March 23.
