The €80.6m in State funding pledged for the regeneration of Waterford's North Quays is still committed to the project, according to the Department of Housing.
The money is considered to have "increased importance" in the aftermath of Covid-19's economic impact, and is viewed as a potential catalyst for the renewal of Ireland's regional cities, a spokesman said.
There have been concerns that the money, which was allocated through the urban regeneration development fund (URDF) last November, would be in danger as doubt mounts over the private developer's involvement in the project.
The chief executive of Waterford City & County Council, the public partner on the regeneration of the city's long-dormant North Quays, said on Thursday that it is "unlikely" Falcon Real Estate Development will be able to meet the funding requirements for the development. They have a deadline of 5pm on Saturday to sign terms for the eight-hectare site.
However, a spokesman for the Department of Housing has said the approval of funding remains in place and is focused on infrastructure for the site, making it attractive for a private partner to develop the area further.
The spokesman noted that the site was granted strategic development zone status in 2016, showing that the Government "recognised the social and economic importance" of the quays to the development of the region.
"[Last year's funding] approval in principle remains in place, subject to compliance with the appropriate conditions of the public spending code, and the Department remains committed to this necessary State investment in Waterford City," the spokesman said.
A further €30m committed by the Department of Transport is also expected to remain secure.
The Department said it is in regular contact with the local authority to assist in their development and advancement of the complex project, and was advised by the council that it had extended the contract with Falcon, to allow it "time to put in place the necessary funding for the project, given the obvious constraints" imposed by the pandemic.
The developer was to present its evidence of €355m funding to the council today. This is a precondition of the contract, and the local authority will deliberate on the funding proposal over the weekend before releasing its decision on Monday morning.
Under the developer's plans, the site is to include a 15-storey hotel and conference centre, twin blocks of office space rising to seven storeys, 300 apartments, and an open public space.
It received planning approval last July and an estimated 3,800 jobs are to be created if it goes ahead.