The Premier of Niue, Toke Talagi, says his government is working with the European Union to finalise development projects using more than half a million US dollars worth of funding.
Last week, a member of parliament put forward a motion for the funds to be distributed among the villages but that motion was defeated.
Mr Talagi says the option would not have fit the EU's provisions.
He says the government's focus is now on private sector and village developments.
"We're hoping to incorporate the villages into a small business that would help to develop accommodation facilities in one of the old schools we have. It's about 400,000. 100,000 Euro will be allocated towards private sector development through the Niue Chamber of Commerce. And 300,000 euro will be allocated towards this particular project for village development."
Niue's Premier, Toke Talagi.