Taxpayers face a $13m bill, and tentative plans for a National War Museum have been canned, after the Government failed in efforts to prolong the life of Sir Peter Jackson's troubled Great War Exhibition.

The issue had seen Ministry of Culture and Heritage at loggerheads with Massey University over the future of Wellington's Dominion Building, with the ministry wanting to extend the lease and lifespan of the exhibition and the university wishing to reclaim the space for its college of creative arts.

A joint press release from the ministry and university this evening indicated Massey had won that tussle and would soon reoccupy its building, with the exhibition's last day flagged as December 2.

The Government failed in efforts to prolong the life of Sir Peter Jackson's troubled Great War Exhibition. Photo / Mark Mitchell
The Government failed in efforts to prolong the life of Sir Peter Jackson's troubled Great War Exhibition. Photo / Mark Mitchell

The move will trigger an estimated $12.7m in costs for taxpayers for removing the elaborate recreation of Belgian streets and battlegrounds, and large pieces of World War I memorabilia - including artillery pieces and a tank - loaned from Jackson's personal collection. Installation of many of the pieces had required the use of a crane and removal of parts of roof of the heritage-listed building.

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The exhibition had a mix of public and private funding - including millions from Jackson and $7.8m from Government - but contractual arrangements landed the "make good" provisions with the ministry. This provisions blew out - initially estimated at only $2.6mn - as ministry auditors became aware of the scale of the production.

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The "Pepper's Ghost" NZ soldier talking through the dangerous job of a tunneller, part of the Quinn's Post Trench Experience in The Great War Exhibition. Photo / Mark Mitchell

The exhibition had been hurriedly organised in late 2014 to commemorate the centenary of World War I - opening only months later in 2015 on Anzac Day - but suffered long delays in finishing displays after Jackson's Hollywood film commitments led to competing demands for his time.

Ministry of Culture and Heritage chief executive Paul James in a statement claimed the exhibition was a success with more than 400,000 visitors.

"We would also like to warmly thank the National Military Heritage Charitable Trust for their excellent work in running the exhibition and Sir Peter Jackson for developing the exhibition and lending his extensive collection of First World War artefacts and memorabilia," James said.

The Herald last month reported ministers had been briefed initial plans for the exhibition had relied on over-optimistic visitor projections and the project was beset with accountability and financial reporting problems.

The exhibitions' signature display - a painstaking recreation of Quinn's Post on Anzac Cove built by Jackson and his film-making companies - was three-and-a-half-years late in opening and only began accepting visitors in April.

The decision to close the exhibition after final Armistice Day commemorations means the Lord of the Rings director's multi-million dollar, multi-sensory creation will only have been open for seven months.

King Willem-Alexander and Queen Maxima of the Netherlands are shown through The Great War Exhibition by then Chief of the NZDF Lieutenant-General Rhys Jones during a three day visit to New Zealand by the pair in November 2016. Photo / Pool
King Willem-Alexander and Queen Maxima of the Netherlands are shown through The Great War Exhibition by then Chief of the NZDF Lieutenant-General Rhys Jones during a three day visit to New Zealand by the pair in November 2016. Photo / Pool

The development also appears to signal the end of tentative plans - estimated in a scoping business case to cost up to $237m - to use the exhibition as a pilot for Government to acquire the building and establish a permanent National War Museum.

A request for comment from Jackson's spokesperson was not immediately returned last night, but last month the filmmaker told the Herald he was supportive of a permanent war museum but "that requires a commitment from Government, which to date I don't believe has been forthcoming".

A spokesperson for Massey University said it was hoped the building would return to academic use by the start of the 2019 academic year.