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 Hopoateis 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.
New Manly coach Trent Barrett has told AAP that Hopoate had a lot to offer as a coach and was "more than welcome at our football club".
He said Hopoate had moved on from his controversies, the onfield lowlight of which was a 12-match ban in 2001 for sticking his fingers up the backside of opposition players.
Hopoate holds the inglorious record as the NRL's most suspended player.
