Environmental lawyers could be stripped of part of their public funding after presenting "confected evidence" in a major legal battle against gas giant Santos.
The Environmental Defenders Office took Santos to court on behalf of Tiwi Island Traditional Owners last year, claiming the controversial pipeline on the Barossa project interfered with Indigenous cultural heritage.
Justice Natalie Charlesworth rejected the EDO case on January 15, accusing the lawyers of confecting evidence and coaching witnesses during the hearings.
Northern Territory Chief Minister Eva Lawler said the government would be reviewing its $100,000-a-year funding arrangement following the failed prosecution.
"There does need to be some consequences for anybody who's lied, particularly (about) something so important to the territory economy," she told reporters on Monday.
"We need to have a look at that contract ... and I've asked Environment Minister Kate Worden to have a look."
Ms Lawler said the government wanted to "see the economy boom" in the NT and would continue to do so with the environment in mind.
EDO CEO David Morris said the group had not been contacted about the NT government's funding review.
"We are always happy to discuss with government the important public-interest work we do and the environmental policy analysis we provide," he said in a statement
Mr Morris said the the EDO was a "crucial community service" that had operated in the NT since the early 1990s.
"(We have) recently engaged constructively on the major reforms of environmental protection laws in the NT, assisting the government to bring those closer in line with contemporary practice in Australia," he said.
The EDO is jointly funded by philanthropists and state and federal governments, with $8.2 million allocated over the next four years from the Commonwealth.
The non-profit litigation group rakes in $13.3 million a year, with the remaining revenue coming from state and territory governments and philanthropists.
State government grants make up 10 per cent of the funding arrangements.
Federal Environment Minister Tanya Plibersek would not confirm whether the federal government would review its position.
Days after the federal court decision, the West Australian government said it would not pull its EDO funding of $800,000 between 2022 and 2025 but urged the group to rethink legal strategies.
Federal opposition environment spokesman Jonno Duniam said confidence in the regulatory process needed to be restored.
"The EDO's case has proven to be a waste of valuable time and resources for all involved," he said.
"The first thing that Labor could do to improve this would be to defund the EDO."
In her judgment, Justice Charlesworth slammed the EDO evidence of Indigenous heritage as "so lacking in integrity that no weight can be placed" on it and said there was "a significant degree of divergence" in the evidence given by Tiwi Islanders.
She said an EDO lawyer and an expert witness had engaged in "a form of subtle coaching" of some Tiwi people, getting them to tell "their stories in a way that propelled their traditions into the sea and into the vicinity of the pipeline".
Santos was approved to begin laying the pipeline, though on Thursday revealed the court battle would incur an extra $US200 million to $US300 million ($A304 million to $A456 million) in capital expenditure costs.
