According to the NRL club, which has lodged a winding up application with the New South Wales Supreme Court and also suspended all pre-paid corporate catering services for Friday night's game against Adelaide United at EnergyAustralia Stadium, the debts relate largely to game-day costs.

The Knights insist that they have been 'forced to take the unfortunate and extraordinary action' to suspend the catering on Friday night because discussions with the Jets on Thursday had failed to result in the Jets agreeing to pay the amount owed in full.

"We have a responsibility to our business to ensure we do not incur further costs on the Jets' behalf - where there is a history of little or no likelihood of recovering those costs," said Newcastle Knights chairman Robert Tew.

"The Jets have been advised that they have left us with no other practical choice. It saddens me that we have to take such action but after numerous attempts to recover this debt in an amicable manner, the Jets have forced our hand.

"The Jets hire EnergyAustralia Stadium on a cost-recovery basis and we just cannot afford to allow them to build on such a large debt. We have a duty to our business and its members to act in their best interests.

"We are supportive of the Jets and their purposes and therefore are prepared to allow them to continue using the ground, however, we are not prepared to bankroll their game-day operational activities any further.

"This is an unfortunate and last resort for the Newcastle Knights after many months of seeking to rectify the matter directly with the Jets management.

"For the sake of Newcastle and Adelaide players and supporters and soccer in our region generally, we have agreed to allow the Jets to use the ground to complete the fixture schedule but we will not be incurring any further costs on the Jets' behalf."

According to Knights chief executive Steve Burraston the club has made the decision to act now in order to try and get the Jets to resolve the situation before the A-League finals series begins next weekend.

"We feel very sorry for the players, coaching staff and supporters because this is a matter out of their control but we can't continue to incur Jets costs," Burraston said.

"We will do everything in our power to ensure the players can continue to play and train at EnergyAustralia Stadium with minimal disruptions but it is now untenable for the Knights to suffer any further financial loss.

"Part of this is money that has already been collected by the Jets through pre paid corporate packages and not used to pay for catering or beverage services. Unfortunately our hand has been forced and supporters need to be aware of the situation."