Dragons boss Dai Flanagan says players such as Will Rowlands cannot be prevented from leaving amid Welsh rugby's continued financial worries.
Wales lock Rowlands, 31, is out of contract at the end of 2022-23 and has been linked with Bath and Racing 92.
"At the moment, we don't know our budget. We can't speak to players," said Flanagan.
However, the Welsh Rugby Union's (WRU) Nigel Walker said Rowlands turned down a contract extension last summer.
Walker, the governing body's performance director, wrote on social media to dispute Flanagan's version of events, saying the rejected offer would have kept Rowlands at WRU-owned Dragons for the 2023-24 season.
The former Wales wing's assertions prompted Dragons chairman David Buttress to reply on social media, saying he was "not going to comment on any individual player's contract status on Twitter".
Walker also confirmed there is a current freeze on contract signings and recruitment while the WRU and regions continue to negotiate the professional teams' future finances.
In his dialogue with rugby fans on Twitter, Walker said the offer made to Rowlands "preceded" the current "embargo" on contractual offers.
Walker also tweeted: "He (Rowlands) has been offered a contract for next season (which doesn't break the embargo) since it was made months ago and remains on the table."
Speaking to the media on Wednesday, Flanagan said: "If one player is out of contract, another 20 are in the same boat."
Rowlands, who joined Dragons from Wasps in 2021 to pursue Wales honours, is currently sidelined by a shoulder injury suffered in the national team's only autumn win, against Argentina, on 12 November.
Flanagan is in South Africa where Dragons hope to bounce back from last weekend's United Rugby Championship (URC) defeat by Lions when they face an arguably tougher test at Stormers on Saturday.
After that, Dragons return to Lions on Saturday, 10 December in their European Challenge Cup opener.
Flanagan hopes issues surrounding the game's financial future can be resolved before leading players begin to settle on futures elsewhere.
"I'm trying to be as transparent as I can," said Flanagan.
"It is challenging because like every other region we don't know our budget for next year... I'm sure that there's reasons behind it - that's above me because my job is to coach and prepare this team.
"I speak to the individuals as often as I can and to reassure them that they're important to us, and going forward hopefully we can get some proper conversations happening as soon as possible."
Meanwhile Flanagan hopes he will soon be in a position to re-emphasise his vision for his Dragons, saying: "I remember when I first came in and speaking to people (and asking) 'what do we want to be?'.
"Do we want to be a place that people want to come and play?
"We want to be the place in Welsh rugby, if not British rugby, where people go 'they do things right there, the Dragons, they do the right thing all the time'.
"And when you do the right thing all the time, it's a place people want to be around and that's what we want to try and build here.
"I've been a player myself and you get to this time of year and you become a bit nervous. You've got families, a lot of players have got bills to pay, mortgages to pay and it's not nice.
"I have big empathy for these players and hopefully we can get things moving."
Meanwhile, Flanagan expressed hope that Wales prop Leon Brown and wing Ashton Hewitt - whose international chances have been blighted by injuries - will soon return to action.
Hewitt underwent ankle surgery after suffering an injury in September having just returned following 18 months out with a knee injury.
Brown missed Wales' autumn internationals after having surgery to correct a nerve problem in his neck.
Flanagan said: "He (Hewitt) may not play this weekend, but hopefully we see him play play on tour, so that's a big step forward for him.
"Leon's still in progress this week so maybe, but Ashton specifically has made a big step forward and Leon's only nine weeks post-op, so it's important he's around us so we can give him the best treatment with the best physios and see where we get him this next couple of weeks."