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Nathan Tinkler has officially walked away from the Newcastle Knights and warned its new owners will likely have to cut jobs and funding grants.

Tinkler confirmed in a statement that the Hunter Sports Group (HSG) would have no further role in the Knights and called for "immediate action to ensure a speedy transition to a new ownership model".

The Knights Members Club earlier this week issued HSG with a deadline to hand back control of the club by the end of the week.

Tinkler's statement continued "this negotiation has dragged on for over 10 weeks and it is clear the Members Club has stalled the process.

"After injecting over $20 million of my own money it is time to stand aside, and hopefully the Knights will prosper and not revert to the old management style and formula that almost sent the club into liquidation three years ago."

Tinkler said HSG's absence will leave a gaping hole in the Knights organisation and that revenue will have to be replaced via significant cost-cutting measures.

He added "since HSG took over the Knights, we have lifted the annual spend of football operations to be over $3 million above the average NRL club.

"Commercial reality will mean staffing numbers will now need to be reviewed, grants cut to the junior league programs and the local Newcastle competition.

"I have done my bit for the town by investing more than $20 million and saving the Knights from liquidation and now it is time for someone else to step up to the plate."

Tinkler also responded to media reports that the club was $20 million in debt, stating "the debts of the Club are substantially less than the $10.5 million, which is currently sitting in a bank account and not earning interest."

According to Tinkler, his investment saved the Knights from liquidation and pointed to the success of the under-20s, Harold Matthews and SG Ball teams as evidence he is leaving the club in a better position than he found it.

He stated "over the past three years we have also provided every opportunity for the Knights NRL team and coaching staff and I'm sure this will pay off down the line.

"On a personal level, the most inspirational moment of the past three years was last week when I visited Alex McKinnon in hospital and saw what the true Newcastle spirit was all about.

"I want a successful Knights club, which generates pride for the whole Hunter, but I cannot understand why the local press simply want to criticise the club, its players and attempt to bring down everything that is great about Newcastle and the Knights.

The Knights are currently last on the NRL ladder with two wins from their first nine games after an off-season marred by scandals.

There are also questions over their NRL prospects with the future of coach Wayne Bennett in doubt.

Earlier this week, Bennett - who is contracted to HSG, not the Knights - said he was "waiting and seeing" where the ownership saga would lead with regards to his coaching tenure.

Bennett stated "I'm not contracted to the Knights and there's a number of my staff involved in that as well.

"So we just have to wait and see what happens. It won't be my call whether I want to stay or not, it will be their call.

"I don't know who is going to own it so I don't know what's going to happen. I am just waiting and seeing."

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