A federal review has found the Environmental Defenders Office (EDO) did not breach a funding agreement during a court case aimed at suspending an undersea gas pipeline off the Northern Territory coast.
The Department of Climate Change, Energy, the Environment and Water has released its report on the EDO's conduct, after Santos won a federal court challenge in January initiated by a group of Tiwi Islands elders.
Justice Natalie Charlesworth criticised the EDO in her judgement, saying its lawyers had engaged in "a form of subtle witness coaching".
She found there was "an inference that Indigenous instructions have been distorted and manipulated" by the EDO’s lawyers.
However, the review has found the EDO did not breach the terms of a $8.2 million grant agreement between it and the federal government between 2022 and 2026.
It also found there was "no evidence indicating potential fraud".
The review did recommend the grant agreement be changed to "expressly [require] EDO to comply with their relevant professional legal standards".
Following the Justice Charlesworth's judgement, the federal opposition vowed to halt federal funding to the organisation if elected, while the Northern Territory government also expressed concerns about its funding arrangements with the EDO.
The group of Tiwi Islands elders took the gas corporation to Federal Court over its plans to lay a pipeline between the Barossa Gas Field and Darwin, arguing the route would damage underwater sacred sites.
Justice Charlesworth ruled in favour of Santos, finding there had been disagreement among relevant Tiwi Islanders over whether the route would impact these sites and cultural songlines.
NT Environment Minister Kate Worden previously said its $100,000 annual funding of the EDO was under review after the case against Santos failed.
She told the ABC discussions about the future of its funding would continue once an internal review by the EDO was completed.
The EDO has been contacted for comment.