Baron has praised the government's involvement
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England's rugby union governing body is hesitating at having to stump up £80m to host the 2015 Rugby World Cup.
The Rugby Football Union is worried it could be bankrupted by the demands for a guaranteed sum by the International Rugby Board (IRB).
"In these difficult economic times that's a real tough ask," RFU chief executive Francis Baron told BBC Sport.
"We'd love the World Cup to come back to England, but we can't do if it puts the RFU into financial difficulty."
Bids to host the tournament must be submitted by 8 May.
England's proposal is supported by Prime Minister Gordon Brown and the RFU has been in close contact with the government in trying to come up with a bid package.
"We're trying to come up with a package of measures to enable us to come up with a bid," added Baron. "We need a package of support measures from the government - the guarantee is one issue, but there are other issues such as event security.
"We're still working through all the issues and are working closely with the government, who have been fantastically supportive."
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606: DEBATE
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If England go ahead with a bid to host the 2015 tournament, they will receive the backing of the Welsh Rugby Union whose chief executive Roger Lewis hopes some games would be held in Wales.
However, Lewis emphasised the WRU is not seeking to make a joint bid with their English counterparts.
He said: "To be absolutely accurate I feel this should be led and bid for by the RFU, but we will have a relationship with them, all being well.
"I've always said that I feel for this to be successful for the northern hemisphere and for the UK it should be led by the RFU and that continues to be my position.
"I've always said this: to be logical about it. We've got to apply the logic here as opposed to the daft rugby politics.
"If this comes to the northern hemisphere, which it should do after the challenges of 2011 in New Zealand, I think it's got to come to the UK.
"It's got to be led by the RFU and Wales has got to be involved in it and I'd be very surprised and hugely disappointed if that were not the case."
Scotland withdrew from the race to co-host the 2015 event on Wednesday.
The Scots had wanted to host a pool and at least one quarter-final but could not secure an agreement with the English, Irish and Welsh unions.
Japan, Italy and South Africa are also in the running, while Australia pulled out, saying Europe was the logical next destination after New Zealand host the tournament in 2011.
The IRB will vote on the hosts for both the 2015 and 2019 World Cups on 28 July.
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