THE Australian Rugby Union has revealed it has been unable to come to an agreement with NSW and Wallabies back-rower Rocky Elsom over the length of his new contract.

The ARU yesterday said it wanted Elsom to agree to a three-year contract, which would include the 2011 World Cup. Elsom, however, only wants a two-year contract, and then be released after 2010.

This follows claims that Elsom was about to leave the Waratahs and Australian rugby and head to Ireland to join Leinster in time for the next European season.

ARU chief executive John O'Neill, who was clearly exasperated yesterday that the union's dealings with Elsom had turned into a long-running saga that had gone on for several months, explained its priority was signing the form back-rower for the next World Cup.

"Our offer is for three years, and why would it be otherwise given that we want him for the World Cup in 2011?" O'Neill said.

"From what I've been told, he only wants a two-year term, with an early release in 2010. Whilst we are willing to give that consideration, it's very sub-optimal from the ARU's perspective. Why would you let Rocky Elsom go in 2010? It's not a money issue. But it's just for his own purposes that he wants to get out in 2010."

O'Neill said the ARU had stressed to Elsom that it did not want him to depart the scene.

"We've been incredibly accommodating, and made him a good offer," the CEO said. "[Wallabies coach] Robbie Deans has spent several hours talking to him. He is under no illusions from the administrators and from the coach how much we want him. But we want him for three years. Very simple stuff."

O'Neill added that he was surprised NSW officials believed that the ARU had "under-valued" their Test second-rower Dan Vickerman, and that this was a prime reason why he was preparing to play in Europe next season.

When asked if the ARU had undervalued Vickerman, O'Neill replied:"That is not the case. I had personal discussions with Dan Vickerman. It was not about money. Our offer was fully priced. It was a lifestyle decision. He made that very plain to me and to our negotiators. He told us that he wanted to either go and study at Cambridge or play in Europe. We do try hard to keep every player who we think is worth keeping."

While Waratahs officials remain hopeful of retaining Vickerman next year, the most likely scenario is that he will head to the United Kingdom towards the end of the year.