The Wallabies fullback, one of Australian sport's hottest properties, is contracted to rugby union until after the 2015 World Cup.
But a picture of Folau, his manager Isaac Moses and NRL's head of football Todd Greenberg having a chat at a cafe at Sydney Football Stadium has sent a shiver through Australia's rugby union community on Thursday.
The NRL has made no secret of its desire to lure Folau back to the game that made him a national celebrity, while the Australian Rugby Union has repeatedly voiced a determination to retain the 25-year-old, seen as a vital pillar in the code's struggle for relevance in Australia's crowded sports market.
The NRL played down the meeting as just a chance catch-up.
"Mr Greenberg ran into Israel Folau, who he knows well, while heading to the coffee shop and they had an unplanned catch up," a NRL spokesman told Fairfax media.
"It was not a business discussion."
Moses, who was once suspended for six months by the NRL for his part in a salary cap scandal involving Melbourne Storm players, declined to comment when contacted by Reuters.
Folau has repeatedly stated his intention to see out his ARU contract amid reports of interest from overseas, including big-money offers from powerful French side Toulon.
TWITTER QUIP
He responded to the media attention on Wednesday with humour on Twitter, saying he was set to meet Australian Prime Minister Tony Abbott for a coffee, too.
"Having a coffee with @TonyAbbottMHR today. If anyone wants to take a photo. Thinking about going into politics next," he tweeted.
Worries about a crippling player drain for Australian rugby came into sharp focus earlier this month with the announcement that Wallabies winger Nick Cummins had decided to quit Australia to play in Japan.
Local media have also reported that Folau's Wallabies and Super Rugby team mate Kurtley Beale is weighing up a switch to the NRL after being shut out of Ewen McKenzie's starting side during the 3-0 series win over France last month.
ARU boss Bill Pulver played down the player drain, which has included former Wallabies captain Ben Mowen and lock Kane Douglas heading for overseas clubs.
"It is a fact of life that Japan and France have a lot of money to throw at players, but actually we're quietly pleased with the support that we've had for our elite players playing in Australia," Pulver told local media on Wednesday.
"Yes, we've lost a couple, but every year we've lost a couple or more, so we're not unhappy with the outcome.
"Clearly there are a couple of players we would have liked to have kept and from a strategic development perspective that's something we want to keep a very careful eye on. But we're not dissatisfied with the outcome this year."
(Reporting by Ian Ransom; Editing by John O'Brien)
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