Kapiti Mayor Alan Milne said last night that the district council had agreed to accept some liability, in the face of severe pressure being placed on the organisers by the reported $US2 million ($4.73 million) fee for Tiger Woods.
He said the level of liability was based on the relative risks and benefits Wellington City and the Kapiti Coast expected from the event.
Wet weather and smaller-than- expected crowds mean the organisers, Open 2002, are facing significant losses, but the mayors said their councils had not yet been asked for the money.
Open 2002 managing director David Pool has said that all bills will be paid.
Ms Prendergast said the terms of the underwriting were agreed to help protect the interests of creditors.
Factors outside the control of the organisers had meant they faced some serious challenges in staging the tournament.
The mayors said the confidential nature of the agreement was to avoid negative publicity affecting ticket sales.
It is understood Wellington's councillors were almost unanimous in their decision to back the event and that Kapiti's councillors were split 11-4 on the decision.
Mr Milne said his council had been "caught between a rock and a hard place" in making the decision on an event of such sporting stature in its own backyard.
- NZPA
