Anglican leaders cannot spend insurance money from the Christ Church Cathedral on the new cardboard cathedral, the attorney-general has told the High Court.

Anglican leaders have asked Justice Panckhurst for direction on whether cathedral insurance money can be used for the $5.3 million cardboard cathedral being built in Latimer Square.

Justice Chisholm said in an interim ruling last year that the insurance money should be used only for a project on the Cathedral Square site, as it was held by the Church Property Trustees (CPT).

"Given the site-specific purpose of the cathedral trust, it is difficult to see how any insurance proceeds arising from the insurance over the cathedral could be used off site," he wrote.

Construction of the cardboard cathedral, a temporary replacement, is being partly funded with $4m of insurance money from Christ Church Cathedral.

Anglican leaders are pushing ahead with the cardboard cathedral, despite the interim ruling.

However, the attorney-general's written submission to the High Court case states that the Anglican church's claim they can spend insurance money on the cardboard cathedral is "unsupported by cogent evidence".

"Even if the assertion was correct it does not confer authority on CPT to expend money on purposes falling outside the purposes of the Cathedral trust."

The attorney-general concludes the church would have to apply for the terms of their trust deed to be altered so it could spend insurance money on the cardboard cathedral.

Altering a trust deed requires approval from the attorney-general and the High Court, which can hear objections.

"There may (or may not) be good reason why the Cathedral Trust should be varied to accommodate the purposes referred to in the claim. But until a variation is approved, the use of the insurance proceeds for the purposes referred to in the claim fall outside the purpose of the trust as found by the High Court," the submission states.

The Anglican Church says the insurance funds can be used as the policy was paid for the parish rather than the trust.

The Great Christchurch Buildings Trust, which is campaigning to restore the cathedral, told the High Court this week that diverting the insurance money jeopardised the cathedral.

GCBT lawyer Francis Cooke said the cathedral was in danger.

"Where will the money come from to restore the building or build a new cathedral to replace it? Every dollar spent on the transitional cathedral is a dollar not available to fulfil the public purpose of the trust."

Justice Panckhurst has reserved his decision and will give directions once he has considered the case.

- © Fairfax NZ News