The Otago Rugby Union says it now has every chance of avoiding liquidation.
The union's chair Wayne Graham says he is cautiously optimistic.
"A lot of numbers are starting to point in the right direction, whereas a couple of weeks ago things were looking grim."
Mr Graham says the chance of saving the union has risen this week to about 50% but more time is needed for negotiations.
The board of the Otago Rugby Union delayed filing for liquidation on Thursday, to allow more time for discussions on a possible recovery package.
The South Island club has debts of $2.35 million and is facing an expected loss of $750,000 this year.
It is the second time the union has put back filing for liquidation as it attempts to piece together a financial rescue package.
The New Zealand Rugby Union, Dunedin City Council, Dunedin Venues Management Ltd, the New Zealand Rugby Players Association and the Bank of New Zealand have spent the past week working through the details of the recovery package.
The club has delayed the decision for another week, until Friday 16 March.
NZRU chief executive Steve Tew says discussions this week have been fruitful and he is now more confident of a resolution being found.
He says the extra week will give all parties the time they need to make final decisions.
Possible player pay cut
There are also suggestions that players' wages will be cut at the Otago Rugby Union if it is to avoid liquidation.
Under its new business plan, the union must cut expenses and cuts to players' wages are a likely option.
Chief executive of the New Zealand Rugby Players Association Rob Nichol says for the union to survive, everyone involved will have to sacrifice something.
"It became very apparent that if there was going to be any rescue package or any legitimate proposal everyone was going to have to play a role."
Rob Nichol says it is crucial Otago union fields a team in this year's domestic competition.