Gloucester Rugby Club and the Kingsholm Supporters Mutual will continue to work together to develop the new Grandstand for the start of the 2005/06 season.
The Kingsholm Supporters Mutual (KSM) is the supporters' organisation set up in 2003 by Gloucester Rugby Club to assist it with the original plans to redevelop Kingsholm.
The KSM had asked the Club to revive plans for a supporters' share issue, and chairman Bob Rumble said: "Like all Gloucester fans, we were delighted when the Club announced that it had decided to proceed with plans to redevelop the main grandstand at Kingsholm. We felt that it was the time for the Club to proceed with the plans for a supporters' share issue that they outlined when re-development was first proposed in 2003."
Gloucester Rugby Club managing director Ken Nottage said: "Firstly we would like to thank the KSM for their continued support. We have met with Bob Rumble, the organisation's chairman and explained that we do not currently intend to proceed with the share issue.
"Bob was very understanding. The financial position of the Club has improved year on year and this has made it easier to source competitive funding from other areas for the new Grandstand development.
"The decision to go ahead with the new development was only made two weeks ago. We're well aware of the timescales we have to work within in order to have the seats in place for the new season.
"The share issue is not a viable option at the moment. We won't rule it out in the long term, but both ourselves and the KSM, through Bob the Chairman, have agreed that the supporter's organisation still has a large role to play in the future of this club.
"We are considering acknowledging the initial pledge from the KSM and its members with a form of benefits in the new season ticket packages for the 2005/06 season.
"Over the course of the next few weeks we'll be meeting with the KSM and confirming the role that they hope to play in terms of fundraising to help us towards our goals."
Bob Rumble added: "We have received confirmation this week that they do not intend to proceed with the share issue and we have asked them to re-consider this decision, which they have addressed, and they haven't ruled it out in the long term, but it's not viable at the moment.
"The most important thing now is that we sit down and plan how we can help, and the good news is that current KSM members will also have a benefits package within the new season tickets. Time is vital and the sooner we get going the better."
Gloucester travel to Oyonnax for the second round of the European Rugby Challenge Cup on Saturday evening, and Director of Rugby David Humphreys is expecting a big test from the French side, feeling that their league position doesn't reflect their recent performances.
Speaking exclusively to Gloucester Rugby TV, Matt Kvesic explained that his decision to extend his contract at Kingsholm was a simple one and that he was hugely excited for the future in Cherry and White.
Speaking after the 55-0 win over CA Brive, Jonny May told GRTV that he's delighted that the team's hard work is starting to pay dividends but was equally happy for his friend and team mate, Charlie Sharples, on what was a big night for his fellow winger.
Speaking to the local media this week, David Humphreys insisted that Gloucester are looking forward to kicking off the new European Rugby Challenge Cup against Brive on Thursday evening, although an unfamiliar opponent and a five day turnaround will pose a challenge.