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Northland and Tasman were chosen by the New Zealand Rugby Union yesterday as the teams to drop out of the Cup as the union restructures its domestic competitions.
While the NZRU action is still classed as a proposal and affected unions have until September 5 to offer feedback, it is widely seen as a fait accompli.
However, Peters has promised a fight, with a legal challenge in the offing as his union and Tasman face life in the Heartland Championship.
Northland would exhaust "all possible remedies," he said yesterday.
"I think it will be, if not the death of Northland rugby, it will certainly be hugely catastrophic. Rugby up here is not just a game, it's hugely part of the community," he told Radio New Zealand.
Tasman had expected to be cut, especially after Marlborough had said it wanted to split from Nelson Bays and go it alone in the Heartland Championship.
But all the same, Tasman chief executive Peter Barr said the news was "gut wrenching".
"We have had our financial issues, but that doesn't make it any easier. It's not a palatable decision, that's for sure," he told NZPA.
The NZRU said last week provincial unions would be assessed on a number of criteria, from population and player numbers to financial performance and administration before the decision was made.
Peters said he had not yet received the letter from the NZRU disclosing the union's assessment results.
"For the last two years we've finished in the first 10, so I don't think anyone could reasonably say that our playing performance has been inhibited.
"In terms of registrations we are about number eight in the country. Population base I think we are in the first 10, if not higher.
"Financial matters...so far we have not been provided any additional money from the NZRU other than what we are entitled to, save for a small advance payment."
Ironically, Northland and Tasman have provided two of the major upsets in this season's Air New Zealand Cup, both beating Waikato in recent weeks.
Barr said part of Tasman's predicament had been brought on by the need to meet the NZRU's demands for improving their stadium.
"That cost us $2.5 million and we are one of the only unions in the country that owns its own ground, so most don't have to worry about those sort of costs."
Auckland, Bay of Plenty, Canterbury, Counties Manukau, Hawke's Bay, Manawatu, North Harbour, Otago, Southland, Taranaki, Waikato and Wellington will vie for premier competition honours next year.
NZRU general manager of professional rugby Neil Sorensen said the review process had been inclusive and thorough, but the NZRU was still anticipating a legal challenge from Northland.
"We certainly haven't dragged lawyers in to go through everything we've said or done, but we have followed a very sound process. (However) we have to be ready for that."
The NZRU will finalise its plans on September 25.
Other changes announced last week include a mid-August kick-off for the Air NZ Cup, following a "protected window" for the club season. The competition format will return to a round robin format followed by semifinals and a final.
The NZRU also announced a review of the Heartland Championship following the changes to the Air NZ Cup.