Dissatisfaction with the way the Cook Islands Sports and National Olympic Committee, or CISNOC, manages its finances has led to threats of legal action from the tennis and triathlon codes.
Both sports confirm they may apply to the High Court to wind up CISNOC.
The Sports Minister, Mark Brown, says any legal proceedings could have major impacts, including the loss of membership of the International Olympic Committee.
He says membership of the IOC and the Commonwealth Games Federatiion provides an additional funding stream for sports.
He says government is not in a position to pick up the tab because it already faces enormous pressure in delivering public priorities.
But Mr Brown says the government is keen to help CISNOC improve its financial management.