Barnaby Joyce has stopped lobbying the government for a $10 million grant for the University of New England's proposed Tamworth campus because the educator says its not ready.
The New England MP was lobbying the government to fund the university campus with some of the $200-million Building Better Regions Fund, which has been redirected to drought-affected communities.
Up to $10 million could be applied for major projects, and Mr Joyce said the funding criteria "fits the bill for the university", as it would "stimulate the local economy".
However, Mr Joyce said there had been a "slight change" in the University of New England's (UNE) plans.
"We had all our ducks lined up again," he said.
"And then word came back from UNE that they didn't believe it would be shovel ready, and they wanted to delay [the funding request]."
UNE did not respond to the Leader's request for a comment.
The university is currently in the process of developing a new business case for the proposal.
In November, vice-chancellor Brigid Heywood said UNE wanted the Tamworth campus to play to the city's strengths, such as agriculture, food processing and music, by offering specialist degrees.
"We're looking at possibly offering food technology and food processing programs," she said.
"Tamworth obviously has a strong reputation around music, so we could provide programs around music technology and digital engineering."