The Pacific Games Council remains confident the 2019 event will be held in Tonga, even if the government follows through on plans to withdraw from hosting.
The prime minister, 'Akilisi Pohiva, said the cabinet made the decision to pull out on Friday, on the basis of a 2013 World Bank report about the economic impact of the event.
Mr Pohiva said he intended to write a letter to the Pacific Games Council informing them of the decision.
Council president Vidhya Lakhan said there may be a small funding shortfall but plans are already in place to address that.
"There are two projects that we had requested the government, through the organising committee, to put in place," he said.
"One of them they did, there is some revenue coming into the games organising committee through foreign exchange.
"And the other one I can't talk about it because it is still in the pipeline but with those two projects we would be able to raise a substantial amount of money that we need."
Mr Lakhan said human resources and very little monetary contribution are required from the government.
"There are other things we could do to make the games affordable for Tonga, to ensure that it stays in Tonga," he said.
"So that would be our first option, if we can't have the full complement of the games and if we cut some corners and downsize a little bit, whether we could keep the games in Tonga.
"That's another option but at the moment we're not looking at those options because we feel pretty confident that we will be able to keep the games in Tonga, even if the Tongan government withdraws (from the host agreement)."
Tongan sports body still in the dark over games withdrawal
Tonga's main sporting body says it has still not heard from the government about plans to withdraw from hosting the 2019 Pacific Games.
Amateur sports and national olympic committee or TASANOC said as hosting co-rights holder, it should be kept in the loop.
TASANOC vice president Lord Vaea told Radio Tonga the association had received numerous calls from overseas partners querying the situation but it did not know anything.
Lord Vaea said, just last week, Mr Pohiva spoke happily of a new golf course being constructed at Popua for the games.
He said the budget allocated $US31 million towards the games, but now he was unsure what will happen to the millions promised from external sources.
The local games organising committee said foreign partners agreed to assistance worth more than $US25 million.