The Christchurch City Council's insurer says the council's quake damaged assets are worth far less than the $912 million being claimed.
The two parties will head to mediation in September to try to break the deadlock in months of negotiations over the payout.
Civic Assurance's chief executive Tim Sole said Christchurch ratepayers had been led to believe the council stood to gain close to $1 billion in insurance money when the reality was something quite different.
Mr Sole cites the example of Lancaster Park which the council said was a total loss worth $143 million.
He said his advice was the stadium could be repaired for $50 million.
Mr Sole said expectations of a large payout meant there was less chance of a successful mediation where a more realistic sum could be thrashed out.
The council has yet to comment.