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Peter V'landys has doubled down on ARL Commission threats to withdraw funding from the NSWRL, unhappy over their refusal to re-run their controversial election.

Peter V'landys has warned he is willing to go to court with the NSW Rugby League, doubling down on a threat to withdraw funding as the game teeters on the verge of civil war.

Just days after the ARL Commission threatened to pull funds if the NSWRL didn't re-run their controversial February board election, the state body refused and instead issued demands of their own.

Included was a call for retraction of a letter sent Tuesday in which the ARLC claimed there had been a breach by the NSW body.

The NSWRL also demanded its monthly funding payment be met in full by 4pm Monday, threatening to claim a breach of agreement if they were not paid.

The clash comes six weeks after Nick Politis and George Peponis quit the NSWRL board after Cronulla CEO Dino Mezzatesta was not allowed to run for election due to a perceived conflict of interest given his duty to report to the Sharks board.

The NSWRL has long said it sought legal advice before making that call.

The ARL Commission hired prominent lawyer Bret Walker to launch an investigation, which disagreed with the NSWRL's decision.

"The NSWRL rejects the ARLC's allegations, that the NSWRL has in any respect breached the terms of its Services Agreement ... between the ARLC and the NSWRL," NSWRL acting chairman John Anderson said in a statement on Friday.

"The NSWRL is plainly and obviously not in breach of the Services Agreement, either as contended by the ARLC or otherwise."

ARLC chairman V'landys told AAP he will not back down and funding will not be forthcoming on Monday, all but ensuring an escalating battle between the two parties.

"We're completely shocked and dismayed that they have taken this confrontational hostile approach," V'landys said.

"All we are asking them to do is run the election again to ensure the integrity exists.

"We have had one of Australia's leading counsel give advice they didn't run the election in accordance to their constitution and the complaint the ARLC has received is valid.

"We're not withdrawing any (letter).

"We won't be paying anything."

Removal of funding would potentially impact grassroots football, but the ARLC would likely instead pay directly to regional and metropolitan areas for their competitions and programs.

Control of the NSW State of Origin team could also be impacted, while talk continues around a national reserve grade competition.

Regardless, V'landys said he would be willing for the matter to go to court if it reached that point and action was launched by the NSWRL over the refusal of funds.

"We didn't create this, the complaint came from one of their own members," V'landys said.

"And we are the peak body, so like any proper peak body we have treated the complaint seriously and acted on it.

"I'm sure any court would find the same thing.

"So they are going to waste a lot of money that should be going to junior rugby league to fight this ridiculous stance."