The Government has withdrawn from playing a part in the world's biggest radio telescope because it says the benefits no longer outweigh the costs.

New Zealand was a founding member of the non-profit Square Kilometre Array Organisation – and last year downgraded from full membership to associate membership.

But the Ministry of Business, Innovation and Employment announced today that New Zealand would withdraw from the project completely.

"The decision reflects official advice from MBIE that the benefits of associate membership in the next 'construction' phase of the project are not sufficient to account for its cost," a statement from MBIE said.

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The array is being built in the deserts of Australia and South Africa and is expected to be powerful enough to detect very faint radio signals that were emitted billions of light years away from Earth.

It is hoped that the telescope will help answer fundamental questions about the universe, such as how it formed and evolved, the origin of cosmic magnetism, and whether there is life elsewhere in the universe.

Vice-Chancellor of the Auckland University of Technology Derek McCormack has previously said downgrading New Zealand's involvement would lock out New Zealand scientists, innovators and engineers from enormous benefits.

"As well as being a mega-science project, the Square Kilometre Array is also the world's biggest ICT projects, encompassing big data science, high-performance computing and software engineering," McCormack wrote in a comment piece in April.

"In other words, beyond science, the major benefactor of New Zealand's involvement is our ICT sector and ultimately, through its innovation, the wider economy of skills, growth and jobs."

He said the NZ SKA Alliance - a collaboration that included AUT, University of Auckland, Massey University, Nyriad, Catalyst, Open Parallel - had collectively invested up to $10 million, more than twice what the Government had put in to the project.

But University of Auckland cosmologist Professor Richard Easther has called SKA a "zombie project" that was not welcomed by most astronomers.

MBIE said that the benefits of New Zealand's participation in the design phase were enduring.

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"They include economic development opportunities created within the ICT sector and the strengthening of international relationships as a result of New Zealand's membership in the SKA organisation."