The Pike River mine will be sealed and there is little or no chance of the bodies of 29 men killed being recovered in the near future, says Prime Minister John Key.
Mr Key said today it was "obviously a very tragic end for the families".
He had previously said the government was fully committed to removing the bodies of the 29 miners and contractors who died in a blast in the mine in November to give the families full closure.
"That is just not possible. It is not an issue of money or time or commitment," Mr Key said today.
Earlier today, Pike River Coal's receiver John Fisk of PricewaterhouseCoopers said closing the mine and handing the land back to the government was the worst-case scenario.
He told NewstalkZB he has to get the "best price obtainable for the assets" which are worth billions of dollars, and handing the land back to the Department of Conservation is at the bottom of the list.
Police sealed the entrance to the mine yesterday after deciding it was too dangerous to continue efforts to recover the bodies of the 29 miners killed in November's explosions.
The receiver has until the close of business on Monday to make a decision on the mine's future.
"The worst scenario for us is that a fence is put around it and the land is handed back to DoC, who are the landowners. That is a possibility," Fisk said.
"If we get the mine into an inert state so that we can have time to look at the various options, and see if it's possible to do a capital raising or to sell the mine and give somebody else the opportunity to do something with it, we will obviously look at that."
Mr Fisk also said the mine could be temporarily sealed for up to a year to make it safe for recovery teams to enter.
That would give receivers time to find a buyer for the mine.
"We are investigating what would be involved in getting the mine into a state where it could be temporarily sealed.
"We could be talking six months or 12 months."
"If it proves impossible or too difficult to go through a process that will enable the mine to be stablised and reentered, then the resources of Pike River are extremely limited.
"We would have to say to the Department of Conservation that we have no responsibility but to hand the land back to them."
Mr Fisk did not want to give families of the 29 dead miners still in the mine an assurance the bodies of their loved ones would be recovered.
Police have given recivers until 5pm on Monday to submit a plan for the future of the mine.
Pike River Coal called in the receiver last month after its main asset was devastated by a series of deadly explosions which left the atmosphere in the mine highly volatile.
Fisk said PRC has about $10 million in cash, and "we need to think carefully about how that could be spent, and also what would be involved with doing that."
The receiver's priority is to get the mine safe so they can assess the options, he said.
"We have to get the best price obtainable for the assets,"
Fisk said. "We're told there's considerable value in the coal that is in there."
Pike River Coal's stock was put on a trading halt and ultimately removed from the stock exchange after the explosions.
Major shareholder New Zealand Oil & Gas is heavily exposed through both debt and equity to PRC, and shed about one-third of its value over the mine's problems. NZOG rose 1.2 per cent to 87 cents in trading today.
The mining company has previously said it has as much as $100 million of insurance coverage for business interruption.
Sealing mine 'only option' - mayor
Grey District Mayor Tony Kokshoorn says he accepts sealing the Pike River mine with the bodies of 29 men inside is the "only option".
"We've got an unruly beast - that is the mine. It is up one day and it is down the next. It makes up its own mind. They think it will never be safe to enter.
"These bodies are going to be entombed for the forseeable future."
But he is disappointed at the time it has taken to give the families a decision on whether the bodies of their dead family members will be recovered.
They have been "to hell and back" and some may still be holding out hope their loved ones will be returned to them, he says.
"The sad part about it is there's still a huge amount of confusion.
"Some have accepted it. Others are hoping the receivers will come out with a magic wand and bring them out.
"They have been to hell and back over the last eight weeks but at the end of the day we have to accept what the Government, police and search and rescue are telling us.
"This is just gut wrenching"