The Government said the proposal "significantly" underestimated the cost and time involved.
A mining expert believes key evidence lies just metres from where the team stopped working.
It's estimated to cost up to $8 million and only take 12 weeks to complete.
The minister responsible for Pike River has been accused of emotional blackmail and lying.
Newshub has obtained a recording of Andrew Little warning families against speaking publicly.
"[He] suggested that serious criminal charges will be laid... it's going to take a lot of time."
Not all of the families accept the decision to pull out.
The Pike River Family Reference Group said it now accepts official advice.
New information has come to light offering fresh hope for answers for the Pike River families.