Quote ="Kelvin's Ferret"I've seen at least one version that leads heavily with a crude kind of class war narrative (northern industrial proletariat vs southern bourgeoisie), now there were clear class based elements to it (I don’t think anybody doubts that), but they shouldn’t be overplayed in relation to the underlying commercial interests of the clubs who broke away.'"
Apparently in Yorkshire the County RFU turned a blind eye to broken time payments and allowed the Yorkshire Senior League (yes there were RU leagues then) a say in running itself. However, the 12 clubs in it turned it into a closed shop and when in the 1894-95 season the clubs re-elected Wakefield Trinity and Hull over second tier champions Morley and runners-up Castleford yet again excluding the second tier clubs the RFU wanted to take the league over themselves and thus 11 of the 12 clubs (with the exception of Dewsbury) decided to plan to break away.
In Lancashire the (3 tier) league was run directly by the County RFU with test matches for promotion and relegation (bottom to play top and 2nd bottom to play 2nd) and thus this issue didn't arise. However, they were stricter on broken time payments and after Salford, Wigan and Leigh got expelled from the league for broken time payments 9 clubs decided to join the Yorkshire clubs in breaking away (ironically Salford weren't one of them) and the two Cheshire clubs of Runcorn and Stockport switched as well, possibly to play at a higher standard than they could in Cheshire but not certain.
Initially there were no plans to have lower divisions as it was assumed eventually the NRU would rejoin the RFU, although some expansion to allow separate Lancashire and Yorkshire leagues did occur in 1896. However, second level clubs, especially in Lancashire, who relied on big matches against the clubs that had broken away started to switch even though it initially meant just friendlies and Challenge Cup. While it took longer for Yorkshire clubs to switch en masse due to them not having been treated well by bigger clubs, the Lancashire clubs largely switched in 1897 and professional second and third competitions were formed (although the third one only lasted a season), and the RU leagues were scrapped. In 1898 a professional Yorkshire Second Competition was formed but this was as a continued RU league in Yorkshire (no idea when it eventually was scrapped).
There's a lot more information than this about the time though in Mike Latham's book The Rugby League Myth: Forgotten clubs of Lancashire, Cheshire and Furness