Nike said on Friday it was shutting down its Oregon Project distance-running group that has produced a host of world and Olympic gold medals after top coach Alberto Salazar was banned for four years for doping.
Salazar founded the Portland-based elite training group with funding from Nike to challenge the stranglehold of Kenyan and Ethiopian runners at elite level.
The sportswear giant had initially backed Salazar last week after he was suspended by the United States Anti-Doping Agency (USADA) for a catalogue of drugs violations.
Salazar's doping offences include trafficking in testosterone, tampering with the doping control process, and administering illicit infusions of the fat-burning substance, L-carnitine.
He denies any wrongdoing and has vowed to appeal the ban and just last week, Nike chief executive Mark Parker announced that the company was standing behind Salazar, a former marathon champion and the leading figure in American distance running in the modern era.
However in a memo to staff Friday, Parker said the Oregon Project was being terminated because of the scandal.
"This situation, along with ongoing unsubstantiated assertions, is a distraction for many of the athletes and is compromising their ability to focus on their training and competition needs," Parker said.
"I have therefore made the decision to wind down the Oregon Project."
Parker said however that Nike would still support Salazar, best known for coaching Britain's four-time Olympic champion Mo Farah, in his appeal against the ban.
"A four-year suspension for someone who acted in good faith is wrong," said Parker in the memo, adding that "the panel found there was no orchestrated doping, no finding that performance enhancing drugs have ever been used on Oregon Project athletes and went out of its way to note Alberto's desire to follow all rules".
However, he admitted that "Alberto can no longer coach while the appeal is pending".
Oregon Project athletes won three gold medals at the World Athletics Championships in Doha that ended on Sunday.
Sifan Hassan of the Netherlands won the women's 1,500 metres and 10,000m while Donavan Brazier of the United States took the men's 800m gold. There is no suggestion either athlete has been involved in doping.
An angry Hassan said she was happy to be tested "every single day" to prove she was a clean athlete.
"I believe in clean sport, I'm always clean, I will always be clean. I believe in the Oregon Project. I've seen Alberto. He's worked really hard and that is what I know," she said in an emotional outburst after running the sixth-fastest time in history to win the 1,500m.
A defiant Farah hit back at critics on Friday, saying he was never given banned drugs while a member of the Oregon group, adding he's "one of the most tested athletes in the world".
"I've not done anything wrong. These allegations, let's be clear here, are about Alberto Salazar," Farah said at Friday's news conference ahead of the Chicago Marathon.
Farah, who has never tested positive, waited more than two years after the accusations were first made against Salazar before parting ways with the coach in October 2017.
"At the time there was no allegation against me. There was an allegation against Alberto Salazar," he said.
Farah will run in the Chicago Marathon on Sunday, with Galen Rupp, another NOP athlete, also taking part.
Nike's decision to shut down the Oregon Project came after athletes including US runner Kara Goucher, who was coached by Salazar from 2004 to 2011 and provided key evidence in the case against him, told the BBC that Nike could not justify keeping it open.
"It has to go," Goucher said. "If I was Nike I'd be bringing in some new coaches and move on from this Oregon Project, because clearly it had principles not in line with clean sport and we have to just start over."
Jeffrey Brown, a Texas endocrinologist who treated many of Salazar's athletes at the Oregon training hub in Portland, was also suspended for four years.
Nike's share price has been hit by the Salazar scandal but following Friday's announcement, it was up 1.08 percent at $94.00 in early trade in New York.
The US company has $4.5 billion in annual running-related sales, according to Bloomberg data, and it is the biggest sponsor of running around the world.