In a letter sent to the league headquarters last week Mr Gutwein threatened to end negotiations with Hawthorn and North Melbourne unless the AFL provided a solid timeline for the establishment of a Tasmanian team.

Last year a taskforce created to assess the viability of having a standalone team on the Apple Isle recommended the state government stop subsidising the Hawks and Kangaroos if the AFL didn't come to the table.

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The taskforce also found that the state had the capacity to fund a team and there was significant community interest in having one established. Launceston businessman Errol Stewart, who was a member of the taskforce, said the Premier's ultimatum was spot on.

He said if Tasmania didn't take a stand it could be left paying for the two Melbourne teams indefinitely.

"Essentially Tasmania is tipping in a lot of money," Mr Stewart said.

"I think they are entitled to give us a timeline on it.

"So I think he is spot on the money."

On ABC Radio on Friday Hawthorn President Jeff Kennett again questioned the viability of having a team based permanently in Tasmania.

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While Mr Kennett supported the call for more clarity around the situation he questioned whether the AFL could afford a new team given the revenue implications of the COVID-19 pandemic.

"My heart says yes to a Tasmanian team at some stage. My economic mind says the last thing I want is a Tasmanian team that's going to fail," he said.

Independent economist Saul Eslake, who has been a long-time advocate for a Tasmanian team, said it was well established that the Tasmanian Parliament was willing to help support a team.

He applauded the Premier's decision to put contract negotiations on hold.

"With great respect to Jeff I just think he is wrong about this," Mr Eslake said.

"In this instance I am behind [Mr Gutwein] 100 per cent.

"Why should Tasmanian taxpayers pay to subsidise games between, on the one hand, Hawthorn and North Melbourne and, on the other, non-Victorian interstate clubs which would lose money if they were staged at [Marvel Stadium] or the MCG?"

Mr Eslake said the economic benefits of having an AFL team based in Tasmania would be wide-ranging.

"The first one is that we would - assuming we were treated with the same respect as every other team - host 10 or 11 games here rather than four or six," he said.

"Some of them would be against big drawing teams like Collingwood, or Essendon, or Richmond. Rather than against teams that have no followers outside of their home states.

"Therefore all of the benefits that have been identified from hosting four games at York Park and two at Bellerive, they would be magnified."