Australian Rugby League Comission Chairman Peter V'Landys has lit the fuse on his explosive argument with New South Wales State premier Dominic Perrottet over stadium funding.

The NRL yesterday threatened to take the grand final away from Sydney over a lack of follow through on promised stadium upgrades around the city.

While an agreement is in place to hold the grand final in Sydney until at least 2042, it also came with the caveat in 2014 that the Olympic Stadium would be upgraded into a 70,000-seat permanent rectangular facility, costing around $800,000 million.

The onset of the coronavirus pandemic saw that scrapped, with V'Landys - a stoush supporter of suburban grounds - then agreeing with the government to redirect funding to suburban grounds.

At this stage, only Penrith's new stadium has been confirmed, although money has also reportedly been promised for Leichhardt, Brookvale and Shark Park in Cronulla.

It's understood a handshake deal was in place as early as April, however, recent flooding causing chaos on the state budget has caused the NSW government to renege on the deal, suggesting the funding wouldn't be immediately available.

"The NSW government remains committed to upgrading suburban stadiums however following recent natural disasters and the COVID-19 pandemic, it is appropriate that further investment in stadia is staged," Perrottet said in statement.

"The government has just received the Floods Inquiry Report, which will likely require a significant cost to the taxpayer and I note right now there are still 1366 people without a home in NSW due to flooding."

V'Landys, speaking to 2GB Radio, said you don't backtrack on a deal.

"We looked the premier in the eye, we shook his hand we did a deal and he's just blatantly reneged," V'landys told 2GB.

"That's the summary. When you when you do a deal and you shake someone's hand you honour that agreement.

"How is any organisation or business going to do it make an agreement with a NSW government when it's got a precedent of reneging?"