The South Island's only wildlife hospital, which has helped increase the injured hoiho survival rate from 33 percent to 91, could be denied council funding.

Despite listening to the Dunedin Wildlife Hospital Trust speak, an Otago Regional Council hearing committee has advised against funding the operation.

Trust co-chair Andrew Cunningham says they were disappointed and surprised by the regional council's lack of support.

"We've had a lot of support from the Dunedin City Council, which, unlike the Otago Regional Council, doesn't have a legal obligation to maintain biodiversity in its area."

He says just $217,000 a year would give them world-leading capabilities.

Cunningham says they've saved 61 yellow-eyed penguins in the four months they've been open.

"Without this hospital, what would happen to those penguins? You would be seeing potentially the end of yellow eyed penguins on the mainland."

Cunningham says the amount of funding requested is equivalent to the amount of tourism revenue generated by just 1.7 hoiho each year.