Canberra clubs fear they could be kicked out of the NEAFL in favour of a composite side from the region, which could come into effect as early as next year.
But the move would require the approval of all four teams – Ainslie, Belconnen, Eastlake and Queanbeyan – which have three-year licences to play in the NEAFL until the end of 2016.
The Canberra Times believes the proposal caught the clubs by surprise at a meeting with league bosses in Canberra last week.
It would continue the purge of community-based clubs from the NEAFL, with Tuggeranong being ousted last year along with four Queensland clubs – Morningside, Broadbeach, Mount Gravatt and Labrador, as the league looks to improve the standard of the competition for the benefit of the four AFL clubs whose reserves play in it.
Queensland's three remaining teams are much stronger this year and all sit in the top six, while seventh-placed Ainslie is the only Canberra side with a chance of playing finals.
Ainslie could climb into the six if it beats Sydney Hills Eagles in Sydney on Saturday.
The Canberra clubs' average losing margin to Queensland sides this season is 88 points, while only three Canberra-based players played in the representative side this season.
There were several other possible models outlined at the meeting, but the one-club proposal is believed to be the NEAFL's preferred option.
The Canberra clubs have until the end of the month to respond to the NEAFL's proposal.
It could lead to an exodus of top footballers from Canberra, while the playing ranks would be bolstered by a raft of interstate recruits.
The Queensland teams were restructed to have a similar set-up to the proposal, where the QAFL teams feed into Aspley, Redland and Southport.
A composite Canberra side would take the best players from each AFL Canberra division one club, with any injured or dropped players returning to their Canberra AFL sides.
Funding for the new team would come from the community clubs.
If the proposal goes ahead, the number of NEAFL teams would drop to 11, but it is unclear what would happen to the two Sydney-based teams, Sydney Uni and the Eagles.
Any reform would mean the Canberra AFL first division, the level below the NEAFL, would also need an overhaul.
The top flight of the QAFL has 10 teams, while Canberra AFL first division has just seven.
That includes two new clubs, the Australian Defence Force Academy and Australian National University, which have won just two games between them so far in their first season.
"We met with each of the Canberra-based NEAFL clubs last week as part of our normal in-season review sessions," AFL NSW-ACT general manager Craig Bolton said in a statement.
"As is often the case, we discussed different options for the clubs moving forward in the competition.
"It should be noted that clubs hold a three-year licence to compete in the NEAFL and all agreements will be honoured unless the clubs were to decide otherwise."
Canberra clubs also raised concerns about fixturing at the meeting.
In the past, under-18s, reserves and the NEAFL side generally played on the same day, but that has become a rarity this season following the contraction of the NEAFL.
It has led to a drop in revenue for the clubs, with fewer people spending the day at the ground and then going to the club afterwards.
NEAFL ROUND 16
Sydney Hills Eagles v Ainslie at Bruce Purser Reserve, Saturday 12pm
Belconnen v Eastlake at Kippax Oval, Saturday 12pm