Borders prop Paul Thompson has been ruled ineligible to represent Scotland by the International Rugby Board.
The SRU had applied for Thompson to obtain eligibility on the grounds that he has a grandfather from Lugar in Ayrshire.
But the IRB Regulations Committee confirmed that his inclusion in a 22 man squad for New Zealand A in a match against the Australian Barbarians in July 1999 - despite the fact he did not play - means that he is committed to representing New Zealand under the "one union only" rule.
An SFU spokesman confirmed that they were "disappointed the IRB has not taken a sympathetic view of Thompson's situation, in view of the fact that Paul himself did not appreciate at that time that the 'one Union only' rule was to be introduced from 1 January, 2000."
Under the previous IRB ruling, players with dual eligibility could play for a second union after a three-year wait.
The SFU is considering the full details of the Regulation Committee's ruling prior to deciding whether to appeal the decision, and the SFU also intends to participate in the review of IRB Regulation 8 - which governs eligibility - that the IRB announced last week.