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Reports surfaced this week that new Telford operator the Southern Institute of Technology (SIT) had not received confirmation from the Ministry of Education about its future beyond the end of the year.
Doubts that annual ministry funding of $1.8 million would extend beyond December 31 had led SIT to freeze recruitment of international students and rendered longer-term planning for the 55-year-old institute near Balclutha ''difficult'', the reports said.
SIT chief executive Penny Simmonds did not respond to requests for comment yesterday.
The uncertainty follows a successful 11th-hour campaign by local advocates last summer to keep the institute open, after former operator Taratahi went into liquidation.
Clutha-Southland MP Hamish Walker said the continued funding limbo for Telford was a further blow for staff and students.
''Uncertainty continues for Telford, with the Government's reform of vocational education raising more questions. This uncertainty is already costing it in the loss of [international] students.''
Mr Walker blamed the situation on anticipated reforms to the tertiary vocational sector, which he claimed would ''strip power from regional New Zealand''.
Education Minister Chris Hipkins has proposed centralising polytechnics under a single nationwide organisation.
Clutha Mayor Bryan Cadogan, who also advocated strongly against Telford's closure, said he remained cautiously optimistic despite the recent revelations.
''As with any decision of this magnitude, there will always be a bit of nervousness getting closer to the announcement. The minister indicated the process would take the first half of the year and that is proving to be the case.''
He echoed Mr Walker's concerns over reforms.
''... It would be counterproductive to dissolve identity and autonomy. People have dedicated their life endeavours to Telford, which will not be the case if it becomes part of a conglomerate.''
A ministry spokesman told the Otago Daily Times officials were negotiating with SIT about its future operations at Telford.
''SIT has submitted a business case requesting additional Crown funding to operate Telford in 2020 and 2021. This is currently under consideration by the minister.''
In order to allow SIT to plan ahead and recruit students, a decision would be made ''as soon as possible'', he said.