Taxpayers are facing a bill for $1.55 billion unless South Canterbury Finance can be pulled from the brink of failure before tomorrow night.

Founder Allan Hubbard says a rescue deal is on the table, but it requires Government assistance.

Finance Minister Bill English yesterday confirmed the Cabinet would this morning discuss the future of the $2 billion company as negotiations continued with at least two potential private investors over a package that may be New Zealand's biggest corporate rescue since the Government's $855 million bailout of Air New Zealand in 2001.

Mr English and South Canterbury Finance chief executive Sandy Maier yesterday played down the prospect of a taxpayer-supported rescue plan as speculation, but both refused to rule it out.

Mr Hubbard said such an offer was indeed on the table.

"I know from my personal dealings that there is an offer there that would probably save the company", he told 3 News.

"It may need a bit of assistance from the Government to get it over the line."

Sources close to the company last week tipped a deal with overseas investors that could require as much as $600 million in taxpayer-funded sweeteners and would result in losses of about $250 million.

But should the company fail, the Government would be liable for $1.55 billion in payments to investors covered by its retail deposit guarantee, and may eventually recover less than half of that.

"It's pretty clear that South Canterbury is dealing with a few challenges, but we're not going to comment on any particular company," Finance Minister Bill English said yesterday on TVNZ's Q+A programme.

"I think the interests of both the taxpayers and the depositors are probably best protected if the Government's not part of the speculation."

But when pressed, he would not rule out taxpayer support for a bailout.

Mr English said the situation was likely to be discussed when the Cabinet met this morning.

"In light of the publicity, I'm sure that ministers might want some kind of update."

Last night, Mr Maier said the proposal referred to by Mr Hubbard had probably not gone through the company's board or management.

"That's Allan as shareholder making a comment. We're certainly not aware of anything unconditional we've seen that's capable of being acted on."

A deal involving Government investment was "certainly not on the table with us".

South Canterbury was in talks with at least two potential suitors.

"We've got credible parties with credible offers. The structure and interplay of all these pieces is complex. It may work out and it may not."

Price to pay

Taxpayers' exposure to South Canterbury Finance under the Government's retail deposit guarantee:

* $1.2 billion in retail debentures.

* $350 million in bonds and other securities.