Nathan Tinkler settles Newcastle Knights tax bill Embattled Newcastle Knights and Jets owner Nathan Tinkler. NATHAN Tinkler will keep his most beloved toy - the Newcastle Knights. The coal baron is believed to have paid off a substantial chunk of his company's tax debt to the Australian Tax Office, saving himself from being removed as owner of the NRL club. In an 11th-hour breakthrough, sources close to the deal confirmed to The Daily Telegraph that "the Knights matter had been settled" after a confidential deal was reached over the $1.424 million the club owed the tax office. However, Tinkler is still refusing to pay the $1.063 million the ATO says is owed by the Newcastle Jets and the $184,257 said to be owed by his umbrella company, Hunter Sports Group. Last night he remained in negotiation with the ATO over the extent of those tax bills. Tinkler is understood to be keen to pay the bill, and has the cash. He is merely disputing the exact dollar figure. That matter will be heard in the Federal Court in Sydney today, when it is understood an adjournment will be sought to continue negotiations. Both the ATO and a representative of the Hunter Sports Group refused to comment last night. While the NRL club was never in jeopardy of collapsing under the weight of the debt, the payment of the tax bill will be greeted with cheers at the Knights given Tinkler's popularity with fans and the club's administration. Under a series of terms written into Tinkler's privatisation of the Knights in 2011, the former billionaire funded a $20 million guarantee with Westpac to be used by the club in the event his business empire collapsed and he failed to meet his obligations. Among the obligations was that he provide $10 million in sponsorship, a $2.5 million investment in junior development, and enough working capital to ensure financial stability. If Tinkler and his Hunter Sports Group had failed in their commitment, a certainty if the ATO had successfully wound up the Knights, the Members Club board had the capacity to buy back control of the club for $1 and lay claim to the $20 million. However, last month an independent audit found Tinkler met all of those first-year obligations, a decision that immediately freed up $9.7 million from that bank guarantee, giving him the flexibility to pay his tax debts. Tinkler's Hunter Sports Group owns 99 per cent of Newcastle Knights Pty Ltd, and 100 per cent of A-League club Newcastle Jets.