The Knights and the Government will square off at an arbitration hearing, starting on March 22, that will determine whether the Knights are entitled to compensation for the stadium's reduced capacity during renovations, or whether they must hand over a portion, or all, of an estimated $1.5 million in abated rent.

Knights chairman Rob Tew said yesterday the highest offer his club had received from the Hunter Venues Authority, on behalf of the Government, was for a $120,000 rent reduction as compensation for the demolition of the western stand.

The Knights estimated relocating season ticket-holders and sponsors would cost them about $1 million.

"On behalf of the Knights, I can say that at no time has a representative of the State Government made any clear formal offer to write off 100 per cent of outstanding rent debt - not $1.5 million or any other exclusive sum," Tew said yesterday.

"The Knights have been made one alternative offer from the Hunter Venues Authority - the specifics of which are confidential leading into the arbitration.

"I can, however, say that the alternative offer was convoluted and complex such that it would financially disadvantage the Knights and was therefore refused . . . at no time over the previous 24 months that I have been on the board of the Knights have the Hunter Venues Authority representatives or anybody else purporting to represent the State Government made a higher value offer to the Knights to settle the stadium dispute than the $120,000 offered in early 2009."

Tew said last year that Hunter Venues Authority had approached the Knights to relinquish stadium-management rights, which the club holds until 2017.

He said the Knights rejected that offer because they "calculated that the proposed management structure would be detrimental to the Knights' trading by $500,000 per year", which would eventually send the club broke.