Court documents seen by the Herald show Mau Whenua has discontinued its court action over Shelly Bay.
But the group told the Herald their case is "on hold" and members are exploring other options including the Serious Fraud Office and the Māori Land Court.
A notice of discontinuance dated December 17 has been filed with the High Court in Wellington.
Mau Whenua is a group within Taranaki Whānui challenging whether iwi-owned land at Shelly Bay should have been sold for a controversial $500 million housing development.
Last week it announced the group lost major allied party funding for its court case, leaving members trying to find the lion's share of $2.2 million.
That funding agreement was due to cease today.
The Herald understands the party is WingNut Films, of which Sir Peter Jackson is a director.
It has previously been reported that WingNut Films was bankrolling the iwi group.
Earlier court documents seen by the Herald showed the company had agreed to meet certain costs over and above those met by the plaintiffs.
The donation agreement outlined the company must not interfere with, meddle in, or otherwise influence the proceedings.
Mau Whenua member Dr Catherine Love confirmed court proceedings were discontinued because of a lack of funding.
"It has been a very expensive process to date and we were quoted several million would be needed."
She described the case as being on hold while the group sought to raise enough money to continue.
Love said they were also exploring other options including the Serious Fraud Office and the Māori Land Court.
"This battle is far from over, We need your support, we appreciate all the support that has been given, let's keep it up."
She said the group has received promising feedback from several international foundations supporting indigenous rights.
The current land occupation at Shelly Bay would continue for as long as necessary, she said.
"The mood is actually very positive because there are alternative options, both judicial and non-judicial, that we have at our disposal, so it's a matter of getting those up and running probably early in the New Year."
Love has previously acknowledged the effects of Covid-19 on the film industry and the "difficult decisions" Mau Whenua allies and supporters have been forced to make.
"They have been strong and reliable allies for our kaupapa – to expose and correct injustice, to hold our land, and to uphold environmental principles relating to our land and harbour."
WingNut Films and its directors have not responded to the Herald's request for comment.
Jackson is a long-standing opponent of plans at Shelly Bay describing the development as one that would invoke blocks of Soviet-era apartments dumped on Wellington's picturesque peninsula.