Premiership Clubs have been given dispensation by the IRB to start playing on 17 October next year, during the World Cup’s knockout stages.

The Rugby Football Union and Premiership Rugby have settled their dispute over World Cup compensation, the governing bodies have announced.

England’s 12 clubs are likely to share £13 million provided by the RFU and have been cleared to play matches during the knockout stage of the tournament.

“It’s a reflection of the strength of the partnership that once again we have managed to come to an arrangement that benefits both the RFU and clubs,” RFU chief executive Ian Ritchie said.

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International Rugby Board regulations forbid club games being played during the World Cup, although it has granted dispensation for the knockout stages which begin on October 17 next year.

Alarmed by the possibility of five income-free months because of England 2015 and the off-season, the Premiership clubs requested the RFU cover for their lost revenue.

Some clubs threatened to flout IRB rules and play during the tournament if their demands were not met, but an agreement has now been struck.

Of the compensation to be provided by the RFU, £6m will come from the re-allocation of match revenue and the remaining £7m is incentivised upon the success of the World Cup and the signing of a new heads of agreement.

“We are very happy to continue to invest significant sums into Premiership Rugby and to support their desire to be successful on and off the pitch,” Ritchie said.

“By the very nature of the deal, the more successful the RFU is, the more the clubs benefit, while it is good that Premiership Rugby continue to use Twickenham to develop their competition.

“It is also significant that there is an incentive to conclude negotiations swiftly around a new long-term ‘heads of agreement’ that has proved so successful to date.”

As part of the settlement, England head coach Stuart Lancaster will name his next elite player squad on October 22.

The delay in selecting the squad – moved from its original slot in August – enables Lancaster to pick players who are in form for November’s QBE Series against New Zealand, South Africa, Samoa and Australia.