Rugby union will "bankrupt itself" if clubs are not stopped from breaching salary cap rules, says Sale director of rugby Steve Diamond.

Premiership champions Saracens face a 35-point deduction and a £5.36m fine after an inquiry into business dealings between owner Nigel Wray and players.

Diamond spent two years as Saracens head coach between 2004 and 2006.

"It's a bit naive to think they can get away with it with the processes in place," he said.

"There's got to be a punishment to make them stop doing it. And it's not about them and us - the other 11 clubs pointing the cross-hairs at them.

"It's for the good of the game because if it's not stopped the game will bankrupt itself."

European champions Saracens described the sanctions as "heavy-handed" and will appeal against the penalty, with the punishments suspended until the outcome. A final verdict is not expected until next year.

Clubs cannot spend more than £7m on player salaries, although they are allowed two whose wages do not count towards the cap. Teams can also receive extra money for fielding home-grown players or to pay for injury cover.

"If you commit a robbery in the UK you get a rollocking. You may go to prison for six months," said Diamond.

"If you commit two in the same year and the year after and another one the third year, the judge has to say 'listen, there's a habitual offender here'.

"If you don't give him a substantial penalty he's going to keep doing it. I think that's what they've done.

"What they've done in the past is done and maybe they should take down the integrity and honesty signs from the stadium for a year."

Saracens chairman repeats stance

In a club interview, Saracens chairman Wray stood by his statement on Tuesday, believing the club have not broken the rules.

He said investments he had made with players did not provide certain income, and could not be compared to a salary.

"The size of the fine must be one of the largest ever in sport, despite the fact the disciplinary tribunal said we had not deliberately breached the wage cap," he said.

"We do not believe that we have breached the wage cup - investment is not salary."

Asked about the consequences of the penalties faced by the club, Wray said: "There's no obligation whatsoever to get rid of any players."