The SFL clubs were given the power to decide the fate of Charles Green's Sevco Scotland Limited with the majority of clubs voting to relegate the new club to the third tier.

Green attempted to secure admission for re-entry to the Scottish Premier League but were denied given the old company is destined for liquidation.

The SFA and SPL backed Rangers newco and had offered a reorganisation of the structure if the other clubs agreed to place them in division one.

In a move that could have serious ramifications for the future of Scottish football having effectively broken up the Old Firm between Rangers and Celtic, SFA chief executive Stewart Regan described the demotion as a catastrophe and said it would mark the 'slow lingering death' of the Scottish game.

SFL Chief Executive David Longmuir admitted the decision was unfortunate yet unanimous.

"It has been a very, very important day for Scottish football," Longmuir said.

"We have voted to willingly accept Rangers as an associate member of the SFL.

"The only acceptable position will be to place Rangers FC into the Third Division from the start of the 2012-13 season. This decision followed a tried and tested process

"Today's decision has been one of the most difficult for all concerned but it has been taken in the best interest of sporting fairness, which is the fundamental principle of the SFL.

"We need to focus on rebuilding our game and restoring pride in our game. Twenty Five clubs out of 30 voted in favour of the Third Division option," he confirmed.