The New Zealand Rugby Union says it won't back Taranaki's bid for the 15th Super Rugby franchise when the competition expands in 2011.
The NZRU had received preliminary interest from Hawke's Bay , which withdrew from the process earlier this month, and a group in Taranaki.
NZRU chief executive Steve Tew says they have consistently questioned whether New Zealand has the capacity, in playing depth or financial resources, to sustain a sixth franchise.
The revamped competition will have three conferences. SANZAR has agreed the new team will play in Australia's - but does not have to be based there.
Australia has four teams now, compared with New Zealand and South Africa's five, and is considered the favourite for the expansion side despite concerns over its player depth.
The ARU said last week it would endorse a single bid from Melbourne while South Africa received one expression of interest from the Southern Kings franchise from the Eastern Cape region.
SANZAR is expected to make a final decision in late October.