A row has erupted over who should pay the $225 million shortfall to prepare Eden Park for the 2011 Rugby World Cup after the Government yesterday pulled the rug on special taxes to help fund the project.

As expected, the Cabinet torpedoed Sport Minister Trevor Mallard's dream of a waterfront stadium after the Auckland City and regional councils last week came to different positions and a majority of Aucklanders rejected the site.

The Government has swung behind upgrading Eden Park, subject to resolving design, governance and funding issues. North Harbour Stadium was chosen as a back-up.

The focus now is on paying for the $385 million Eden Park upgrade, particularly after Mr Mallard did a u-turn on introducing bed and departure taxes to take the load off Auckland ratepayers, who are already facing big rates rises.

The minister promised 16 days ago that bed and departure taxes would help to finance either option. Yesterday, he said that was no longer an option for Eden Park because the tourism industry didn't want it.

He hinted that airport and departure taxes could become an alternative funding source as a result of the Government's rates inquiry but that was long after the December 13 deadline to come up with a funding package for Eden Park.

Mr Mallard refused to say how much the Government would contribute to Eden Park but repeated that because it was a regional stadium, as opposed to a "national stadium", it would be less than the $175 million committed to the waterfront.

The Eden Park Trust Board has just $90 million committed to the upgrade and is hoping to get $70 million from the Lottery Grants Board and trust grants.

That leaves a $225 million hole, including $50 million the board believed it had coming from the Auckland City Council.

A confidential paper, dated November 21, shows the council intends to "minimise direct ratepayer contribution" to Eden Park and plans its biggest contribution to be upgrading infrastructure, including a $26 million bridge linking Kingsland to the sportsground.

Mr Mallard and Auckland City Mayor Dick Hubbard came down hard on the Auckland Regional Council to make a contribution.

ARC chairman Mike Lee, whose council unanimously voted for Eden Park last Friday, has refused point blank to give any money to the facility, saying the ARC's role for the cup is to improve rail services.

Mr Mallard said the ARC had a "moral obligation" to help fund what was a regional stadium and he was waiting to hear "the level of their contribution towards their favoured option".

Mr Hubbard accused the ARC of shirking its regional responsibilities. "What part of the word regional doesn't the ARC understand?