John Hopoate has been out on the field coaching Manly's SG Ball team despite being denied permission by the NRL.
On Tuesday the 41-year-old received a letter from Nick Weeks, head of the NRL's integrity unit, saying he was not allowed to coach the team.
The NRL has deemed Hopoate is not suitable to be registered with the NRL as an official.
But in an embarrassment for the NRL, the NSWRL - which runs the SG Ball competition - over-ruled Weeks and gave Hopoate the green light to continue coaching, Fairfax Media reported on Thursday.
The NSWRL said the NRL has no say in their competition.