Justice Minister Amy Adams has confirmed she has received a report on David Bain's compensation claim, but is not commenting on what is in it.
David Bain Photo: POOL
Mr Bain is seeking compensation for the nearly 13 years he spent in prison for the murders of his family, before a retrial in 2009 found him not guilty.
The New Zealand Herald has reported that an Australian judge has found that Mr Bain is not "innocent beyond a reasonable doubt"
In a statement, Ms Adams said she would not consider the judge's report until people close to the case had had the opportunity to provide feedback.
She would not comment on the status of the compensation claim until Cabinet had made its decision.
David Bain's main supporter, Joe Karam is playing down speculation of a setback to his compensation claim.
Mr Karam - who has long believed David Bain's innocence - said the process of deciding whether Mr Bain should get compensation for the years he spent in prison was still ongoing.
He said he had agreed not to comment until a final decision was made.
Joe Karam has been a longtime supporter of David Bain's bid to clear his name Photo: RNZ
But a legal expert said the finding did not bode well for Mr Bain's compensation bid.
Otago University law professor Andrew Geddis told Morning Report that meant Mr Bain failed the threshold cabinet set for compensation.
"What Cabinet has said in the past is, you must show there is an exceptional circumstance. They then said 'we think that exceptional circumstance means innocent beyond a reasonable doubt'. The question then is, are there other sorts of things that can amount to an exceptional circumstance, even if you don't meet that very high evidential threshold."
Listen to Professor Andrew Geddes
In a report released in late 2012, a former Canadian Supreme Court judge, Ian Binnie, concluded that Mr Bain was innocent and suggested he should receive compensation.
However, Justice Minister Judith Collins then sought a review of that report, which criticised the findings as legally flawed.