New Zealand rugby officials say they will do anything in their power to sub-host next year's World Cup and claim the International Rugby Board does not have the legal power to deny them the role.

Australia has already begun preparations to host the World Cup alone after New Zealand Rugby Football Union failed to agree to the terms of the original contract.

The NZRFU said it would not hand over advertising and catering rights to the IRB for the duration of the Cup because local venues already had legally binding agreements.

New Zealand officials have begun preparing legal action claiming that the only the International Rugby Board council can force them out and not the Rugby World Cup Ltd (RWCL).

IRB communications manager Chris Rea dismissed the argument and the threat of legal action.

"Rugby World Cup Ltd is empowered to negotiate the terms of the Rugby World Cup and that's what it has been doing," Rea said.

"It certainly has the power to do so and that's our legal advice."

As sub-host, 23 matches including a semi-final, were to be held in New Zealand. Last week's original deadline of Tuesday was extended because of differences over the scheduling of the National Provincial Championships.

On Friday, the NZRFU signed the agreement but Australian Rugby Union managing director John O'Neill said it had significantly altered the original agreement.

NZRFU chairman Murray McCaw said the IRB was operating like a "bloody-minded, arrogant and leaderless" organisation.

"The NZRFU is a responsible union," McCaw said.

"We are prepared to commit to what we can deliver. We're not prepared to commit to what we know we can't deliver.

"Let me leave you under no illusions. We want to be sub-hosts for Rugby World Cup 2003 and will do whatever it takes to do that."

Australian unions such as Western Australia are already talking about hosting extra cup games.