Why Israel Folau's $10m legal dispute does not 'sit very well'

Wallabies legend George Gregan has taken aim at Israel Folau after suggesting the controversial star is turning his back on the Australian rugby community.

Folau announced on Thursday that he'd officially begun legal action against his former employers Rugby Australia and the NSW Waratahs for unfair dismissal.

The decision comes after the former Wallaby and RA failed to reach an agreement at a mediation hearing at the Fair Work Commission on June 28.

"Unfortunately, our conciliation before the Fair Work Commission did not resolve the matters between us and I have been left with no choice but to commence court action," Folau said in a statement on Thursday.

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RA terminated Folau's multimillion dollar contract over a social media post in which he paraphrased a Bible passage, saying "drunks, homosexuals, adulterers, liars, fornicators, thieves, atheists and idolaters" would go to hell unless they repented.

The committed Christian argues he was unfairly dismissed on religious grounds.

Folau is is reportedly seeking $10 million in damages, an apology from Rugby Australia and the right to continue his career.

There have been grave concerns that if Folau wins his court dispute it will cripple Rugby Australia financially.

While RA CEO Raelene Castle downplayed those concerns, she did tell rugby.com.au in March that grass roots rugby would be the big loser of a continued court dispute.

“Certainly I believe this is money that we could be spending on the rugby community and that’s disappointing," Castle said.

“Every dollar that we spend on legal fees is a dollar that we don’t spend in the community. “That is the reality.”

On Thursday, Gregan weighed in Folau's latest legal decision, admitting many in the Australian rugby community would be "disappointed" with what is happening in their sport.

“Just in terms of the rugby community I don’t think it sits very well,” Gregan said.

“The game is always going to be bigger than the individual.

“This is a decision that’s going to be made in a Federal Court of law but it’s not going to stop the people who drive our game... but it starts there doesn’t it?

“And that’s the stuff which I think leads a really good path for young people, men and women, in terms of what they do not only through their sport but through life in general.

“So I think those people will be disappointed by what they’re seeing publicly but long may they continue doing what they do in their local areas.”

Gregan said he hoped Folau's legal battle didn't overshadow the Wallabies' World Cup campaign, with the potential for a trial to clash with the Aussie team's tournament in Japan.

Folau inundated with money from supporters

More than 20,000 people have donated about $2.2 million to help fund Folau's legal battle via a campaign page set up by the Australian Christian Lobby.

The ACL effort replaced an earlier campaign on GoFundMe, which was taken down by the platform for breaching its service guidelines.

Folau thanked his many supporters in the statement.

"I have been blessed to have received the support of tens of thousands of Australians throughout my journey, and I want to say thank you to everyone who has offered their prayers and support,” he said.

“It has meant so much to (wife) Maria and me over the last few months and gives us strength for the road ahead.”