Saracens have abandoned ambitious plans to play their Heineken Cup match against Biarritz in Cape Town in January after being caught up in local rugby politics.

Saracens wanted the match to go ahead in the Cape Town Stadium, a 55,000-all seat venue that was built for last year's football World Cup. But the Western Province Rugby Football Union decreed the game had to take place at its traditional home, Newlands, the third oldest rugby ground in the world game.

The Cape Town authorities announced last week that the match between Saracens and Biarritz, which would have been the first Heineken Cup game to be staged outside Europe, would be held at the new stadium. That prompted a response from WPRFU, which pointed out that it determined the match venue.

The organisation has come under pressure to move out of Newlands and play Super 15 and Currie Cup matches at Cape Town Stadium, a move it is strongly resisting. After announcing that the Heineken Cup game would be played at Newlands, it announced it was suspending talks over moving to the new ground.

"We were eager to host the first Heineken Cup match ever played outside Europe, to stage a special, spectacular rugby event and to project brilliant images of Cape Town and European rugby across the world," a Saracens statement read. "However, we have no wish to be a catalyst for conflict between the city of Cape Town and the WPRFU. The game will be played in London. We are looking forward to playing a competitive match in Cape Town as soon as local circumstances allow."

Supporters in South Africa who bought tickets will be fully refunded, while those in Britain who had booked air tickets and accommodation will be compensated, the club said.

The dispute between the city authorities and the Western Province union has become bitter. The mayor of Cape Town, Patricia de Lille, this week accused the WPRFU of acting in a "childish and immature" manner by linking the desire to host the Heineken Cup match at the new ground and the negotiations to persuade the union to become permanent tenants. It was against that backdrop that Saracens decided to defuse the argument by pulling out.

Saracens have discussed playing a Premiership match in South Africa. The club is owned by a South African investment company which also has a stake in Western Province rugby.

The England and London Irish centre Shontayne Hape has received a four-week ban after admitting making a dangerous tackle on David Denton during the Heineken Cup match against Edinburgh.