Nathan Tinkler's privatisation of Newcastle has turned ugly with the billionaire mining magnate's management team accusing the Knights of misleading them as to the extent of the NRL club's debts.

While Hunter Sports Group claimed their takeover of the Knights was not in doubt - with a revised timeframe of August 10 - negotiations appear to have soured.

It was initially believed the handover would occur on Thursday, but HSG claim the magnitude of debt the Knights find themselves in is far greater than what had been disclosed.

The two parties came to a financial agreement on the takeover in March, with the proposal receiving a 97 per cent approval from Knights members on March 31.

"Currently HSG is attempting to ascertain the true financial position of the club," a statement put out by HSG said.

"While HSG will meet the club's liabilities under the terms of their agreement, it has become apparent that the level of liabilities outstanding is significantly higher than HSG were advised three months ago.

"These liabilities include a large tax liability. This amount is significantly more than the amount initially advised to HSG in March 2011.

"Contrary to comments publicly made by the board in early 2011 that the Knights' 2010 results would show a `small profit', the club's published annual report for 2010 in fact showed a loss in excess of $1.6 million."

Knights chairman Robert Tew on Wednesday issued a statement in which he accused HSG of having an "inability to pay the existing liabilities as well as an inability to provide a bank guarantee by that date."

As part of the takeover, HSG must secure a $20 million bank guarantee, which the organisation said would be forthcoming by August 10.

Tinkler's group has been very active in reshaping the Knights since the takeover, the biggest coup being the acquisition of master coach Wayne Bennett - who will head to the club on a four-year deal in 2012 looking to become the first man to coach three clubs to a premiership title.

The club also secured the signatures of internationals Darius Boyd and Kade Snowden as well as dual international Timana Tahu, while skipper Kurt Gidley also re-signed with the club.

But the positive vibe since the takeover received approval seems to have vanished.

"HSG is disappointed that the Knights' Board has chosen to discuss publicly the delay in completing the transaction, especially without providing the full information about the financial position and liabilities faced by the club," the statement read.

"HSG confirms the bank guarantee will be put in place, meet all of its obligations and continue to work with the Knights Board to complete the transaction as soon as possible."

Tew failed to return AAP's calls on Thursday.

HSG said it was the Knights who had demanded a June 30 completion date for the takeover to be implemented, which the group claimed had been unachievable.

"There are still a number of contracts and agreements outstanding which need to be transferred to the new entity," HSG said.

"Some of these outstanding agreements and contracts are the responsibility of the Knights to complete, not HSG. There is still work to be performed by both parties to complete this deal."

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