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The Legal Services Agency says it is waiting for more information on the eligibility of Nai Yin Xue for legal aid before making a decision.
Xue, 55, is accused of murdering his wife, An An Liu, in September last year, before fleeing to Australia and dumping his 3-year-old daughter at a Melbourne railway station.
He was arrested in the United States and extradited after an international police alert was put out for him.
His lawyer, Chris Comeskey, yesterday criticised the agency, saying he had applied for legal aid 10 months ago and it should have paid for Xue's legal representation.
"This is just an absolutely disgusting situation for my client to be in."
A bail hearing in the High Court at Auckland for Xue was adjourned until tomorrow to allow the Crown prosecutor to read the correspondence on the legal aid situation.
Mr Comeskey threatened to quit the case. "A significant amount of money has now built up in my chambers and we're no longer prepared to keep carrying that forward. It's not our obligation, it's a state obligation.
"If his bail application fails, he has no other avenues which to pay, and no funding available for his trial."
But the agency's national manager of legal aid grants, Robyn Nicholas, said it was waiting for further information on Xue's financial eligibility.
"We need to be satisfied of two tests which are determined by the Legal Services Act - they are financial eligibility and the interests of justice," she told Radio NZ's Checkpoint programme.
Asked what would happen if Mr Comeskey did quit the case, Ms Nicholas said: "We will make an assessment about whether Mr Xue has the funds to represent himself or get another lawyer or whether or not we should pay."
Xue is due to stand trial in June, charged with murdering his 27-year-old wife. He wants bail so he can work and pay Mr Comeskey.
An An Liu's body was found in the boot of the family car outside the couple's home in Mt Roskill, Auckland, four days after Xue allegedly abandoned his daughter, Qian Xun Xue, in Melbourne.
- NZPA
