A standoff between Team New Zealand, the Government and Auckland Council has intensified over the location and design of the America's Cup base.

The Herald understands the sailing syndicate is deeply upset at a surprise announcement yesterday over an "agreed" plan between the Government and council to deliver a world class America's Cup village on Auckland's waterfront for the 2021 regatta.

In a strongly worded statement, Team New Zealand chief executive Grant Dalton expressed "surprise" at the joint release about the new plan.

A political source said Team New Zealand was unhappy they had not got their preferred choice around Wynyard Basin.

"They want their way and that involves building out into the harbour a further 40m and we don't want to do that," the political source said.

No one from Team New Zealand was willing to be interviewed on the subject last night but the stalemate appears to leave the syndicate in a difficult position. It can either negotiate with the parties over the base's final design – which mayor Phil Goff said was still an option - or failing that, it can take the Cup defence offshore to Italy, as Dalton openly discussed doing last year.

The latter option would carry significant consequences, however, undermining the Kiwi public's goodwill in the team and potentially compromising ongoing Government funding.

In a statement, Dalton said he was surprised by yesterday's developments.

He said Team New Zealand believed it was still working with the Government and council towards a final agreement and had presented a plan on Tuesday costing less than the politicians' "hybrid" proposal for at least seven team bases in the Wynyard area.

"Team New Zealand has always existed with the absolute priority of effectively saving money where possible, and the option we presented on Tuesday has the ability to save tens of millions of dollars," said Dalton, who gave no costings.

This is at odds with Economic Development Minister David Parker who said the hybrid option was $15 million to $20m less than the basin option favoured by Team New Zealand and does not cause delays.

He said the costs had risen across all options with the hybrid option costed at $185 million.

Parker said there was flexibility to make changes to the layout of four bases on Wynyard Point if Team New Zealand had further concerns, but believed the changes met their concerns.

The Herald was unable to get any further comment from Team New Zealand about its next move. A member of the team's board, Tina Symmans, said there would be no further comment to the statement.

Americas Cup Village Proposal Hybrid Plan by Moller Architects. (Image / Supplied)

The hybrid plan incorporates elements of the Wynyard Basin option, agreed by the council in December and publicly notified in January, and the Wynyard Point variant explored by the Government.

The deal clears the way for more land-based locations for America's Cup bases and reduced the proposed extension to Halsey Wharf from 75m to 35m.

Dutch company Stolthaven Terminals has agreed to vacate its southern tank farm site on Wynyard Point early, which allows more room for a proposed America's Cup base.

Prime Minister Jacinda Ardern, Parker and Goff have all expressed a wish to minimise intrusion into the Waitemata Harbour.

The plan presented by Team New Zealand included the 75m Halsey extension, which was in the process for resource consent with a reconfiguration of bases and the ability to house up to seven teams on the Halsey and Hobson Wharfs, all well within the confines of the existing neighbouring wharfs.

"While we are 100 per cent behind the removal of the tanks, timeframe is a hugely significant consideration in the planning for this America's Cup," Dalton said.

"We feel our option presented to Government and Council yesterday [on Tuesday] eliminates the potential for unforeseen blowouts in both time and money when dealing with contaminated land which are factors none of the interested parties can afford in delivering the event on time and to budget.

"At this point, we want to clearly reiterate our continued commitment to hosting the event in Auckland in 2021 and hope we can continue to work to reach a shared agreement with Government and Council," Dalton said.

Said Parker: "Agreement has not yet been reached with Team New Zealand on the hosting agreement and the location."