However, Southland leaders and Southern Institute of Technology (SIT) staff are confident they will be able to work towards the goal.
Last month, Tertiary Education Minister Penny Simmonds and the government released a document that outlined plans to group the weakest polytechnics in a federation and to let the strongest institutions stand alone.
It will replace the previous Labour government pathway, which merged the country’s 16 polytechnics and nine industry training organisations (ITOs) into Te Pūkenga.
TEC deputy chief executive Gillian Dudgeon said for SIT or any other polytech to be able to gain complete autonomy, it would need to have a "robust pathway to financial sustainability".
"At this precise moment in time, there wouldn't be a single ITP business division that could stand alone independently.
"But the work that is under way at the moment is to understand what are the things that could be done.
"What the tough decisions are that need to be taken to move business divisions from where they are today into a position where they are more financially sustainable."
She said there was no way to return to the status quo - or the previous model before Labour's reform.
While she acknowledged it would be a challenge, she said SIT was probably in the strongest position to become a stand-alone as SIT’s ring-fenced reserves that went into Te Pūkenga would return to the institution.
At the time of the merger, SIT had $140 million in assets, which included close to $40m in cash.
"It's just that some things have changed - like the number of learners, the number of international students you have.
"All of those things have impacted the financial viability of this particular project and other funding changes.
"So we can't go back to exactly what it was, but [I] would have to say that you guys should have the strongest case for getting from where you are now to being regularly independent.
An adviser’s report - obtained by RNZ under the Official Information Act - recommended the creation of eight organisations.
Mergers included Otago Polytechnic and SIT; Ara, NMIT and Tai Poutini in the upper South Island; Whitireia, Weltec, Ucol and Western Institute of Technology in the lower North Island; and Unitec and Manukau in Auckland - leaving Northtec, Wintec, Toi Ohomai and Eastern Institute of Technology to stand alone.
However, on Tuesday, SIT operations lead Daryl Haggerty and Invercargill Mayor Nobby Clark told the Otago Daily Times they would fight for SIT’s complete autonomy.
"The whole direction of this proposal is to go back towards a regional or local decision making so we fully support that.
"We think it is good for our community to be able to make the decisions locally," Mr Haggerty said.
Mr Clark said, "we don’t want to be combined with Otago or everybody else".
"We want to go back to the status quo that we used to have.
"There is significant overseas interest in students coming to Invercargill - it seems to be safe, it seems to accommodate for international students and is free for our local community.
"We need more casual workers, especially for the hospitality sector, [who] can work while they study as well."
