Former head coach Holley was part of the Ospreys coaching staff who between 2003 and 2012 won four league titles and an Anglo-Welsh Cup .
The 55-year-old former full-back, who hails from Aberavon, says the region’s faithful would not support losing their side.
“To Ospreys fans, it probably confirms to them what is going on behind the scenes that is not being made public,” said Holley.
“There is an air of sadness, anger, disbelief. Your average fan takes things on face value.
“Let’s talk hard facts. Who has been the most successful region?”
Holley highlights anger among Ospreys fans who he says “won’t entertain” a potential 40-mile trip to watch rugby in Cardiff.
“They are die-hard fans who have gone through the hardships of the 2000s, established a brand and have two generations of supporters who have only known Ospreys,” he said.
“Ospreys are doing good things in the community and on the field are still reasonably competitive because they have that culture.
“Ospreys people will say they are one true region. That must count for something as well as the success.
“It is a hot-bed of Welsh rugby. Swansea, Neath, Aberavon or Bridgend. But there has always been the feeling the Ospreys have been the target, the ones to go and that creates the anger.”
And Holley, who also coached Bristol to English rugby’s top-flight warns Welsh rugby has reached a critical juncture.
“We are on the precipice, we don’t realise how close we are to losing our game,” he said.
