An application has been lodged to leave a large chunk of the Rena on Astrolabe Reef, something which Tauranga's mayor says will create a bigger mess for the city.
Rena's owners and insurers spokesman Hugo Shanahan said the position of the wreck had moved and the removal of the remainder of the ship's accommodation block would not be pursued.
He said the remaining section would form part of the resource consent application proposal which was lodged with Bay of Plenty Regional Council on Friday.
After tropical cyclone Lusi in March, it was thought the wreck had moved and removal work stalled while an underwater sonar survey was conducted.
"The remaining section now lies in deeper water, between -24m and -53m, and will therefore form part of the resource consent application proposal," he said.
Roger King, of TMC Marine Consultants, said the aft section of the wreck had rotated on the stern.
"So it is now lying further to starboard and has been significantly weakened, presenting an even greater safety risk and technical challenge for ongoing salvage operations."
However, he said the movements had helped expose container and cargo debris which were previously difficult to access within holds four and five of the wreck.
"As a consequence, Resolve Salvage and Fire is reconfiguring its large RMG 1000 barge to resume operations to further reduce the debris field, which covers the area of seabed between the bow and aft sections, and alongside the wreck to a depth of about 30m."
After debris can no longer be recovered sufficiently by a hydraulic grab and crane, divers will reassess the state of the debris field to identify specific areas which require further work, he said.
Tauranga Mayor Stuart Crosby said he was not surprised by the proposal to leave the accommodation block on the reef and saw it as a way for the insurers of Rena to cut their costs.
"Rena is going to continue to break up despite expert opinion we were given.
"Twenty-four hours after we had a salvor expert tell us at council it wouldn't, it did move.
"So the Rena is going to continue to break up and create a wider debris field and a bigger mess.
"We now have to go through the process of the resource consent which will be the biggest consent in New Zealand in regards of a wreck being left."
Mr Crosby said he wanted to encourage everybody in the Bay of Plenty to understand what was going on with the Rena as "it's definitely going to be a shambles well into the future".
"The insurers just want to walk away from it."