Unfair divisions leading to safeguarding concerns

I'm not really sure where to turn for support so thought I'd ask here.

I am one of the coaches for an U12s mixed team. Last season, we played in the 'D' division (out of 8) and were one of the stronger teams.

This season, for U12s, our league has gone from 8 to 4 divisions and we have been placed in the 'B' division.

At the same time, quite a few of the stronger teams have requested to drop down from the 'A' division because there are 2 - 3 academies there that tend to walk away with everything.

The issue I'm struggling with is that it's clear from the first 5 matches that we in the wrong divison and we are getting overwhemingly thrashed every single match. It's hard to take positives from it and it's having such an effect that I would argue it's a safeguarding issue: I'm having to handle kids who aren't looking forward to playing, who are getting upset and crying mid-match when the opposition put the 8th goal past them, who are then coming off totally distraught after losing match-after-match. It's such a mis-sided division and we are really out of place.

We also have parents who are growing a bit despondent and having to deal with the aftermath of a drubbing every Sunday. As coaches, we feel pretty useless. We're not playing too badly, but we're just not at the same level as our opponents are.

We have asked the league whether we can move down a division but we have been told that from U12s onwards they don't do this and so we need to stay in the same division all season.

We are now at the stage where we are considering whether to withdraw from the league entirely; we are already forfeiting upcoming matches against the league leaders, who are routinely winning by cricket-score scorelines.

The league aren't interested. It's not that we're necessarily in the wrong division, but that the better teams have dropped out of the division they should have been in.

Any ideas how to handle this? I believe from a safeguarding perspective that it's not appropriate to force the players to continue all the way into next year playing teams who are way above them - although there will be some positives to take from how we play, I just don't think it's a good approach to matches to start from the mindset of 'let's set ourselves a target to concede fewer than 5 goals today'. It's harming their confidence and making them not want to play football, as evidenced by the fact that some of them are now dropping out and prioritising other sports. It's a vicious circle.

Nobody would mind losing every single match if it was at least competitive and there weren't many goals between us, but we're talking quite comprehensive defeats - 4-0 down at half time sort of thing.

Has anyone else been in this situation and how did you resolve it? How can I be more forceful with the league? We are not the only team in the same boat - there's another team like us who have let in 30 goals in 5 games, no points on the board.