Gladys Berejiklian’s government is on the back foot after a firm that knocked down Sydney’s Allianz stadium refused to rebuild the venue for the amount of money on offer from the government.

The New South Wales government is searching for another company to rebuild the stadium after Lendlease rejected its offer.

The total budget for knocking down and rebuilding Allianz stadium at Moore Park is $729m.

The NSW sports minister, John Sidoti, on Friday said Lendlease’s stage two offer “did not meet the government’s expectations so we are looking for another builder in a competitive market”.

It is understood Lendlease did bid for the construction phase but the government wanted the company to do the work for less money.

On Saturday, amid criticism from the opposition and the Greens, Sidoti tried to ease concerns by saying the stadium would still be completed by early 2022.

“The NSW government always delivers on its promises and we will deliver the Sydney Football stadium on time and on budget,” he said. “In a competitive market, we will find the best deal for the people of NSW and work is under way to find a builder.

“The project has always been split into two stages of demolition and construction.”

Greens MP David Shoebridge said it was “always a joke” that the government priced the project at $729m before it was designed.

“Now they have demolished the stadium and are just now finding out they can’t get it rebuilt for their initial estimate,” he tweeted. “What kind of government knocks down a functioning piece of infrastructure before they have designed or priced its replacement?”

The opposition sports spokeswoman, Lynda Voltz, said Berejiklian promised at the March election she had the project under control.

“Well, the election’s over and the wheels have fallen off the bus,” she said. “There is a demolished wreck in the middle of Sydney tonight and Gladys Berejiklian has no plan to fix it.”

Before the March state election a local community group, Local Democracy Matters, took unsuccessful legal action in the NSW land and environment court to stop the knockdown and rebuild.

“The local community is very concerned about the hundreds of millions of dollars being spent on this wasteful project, from a government that can’t even get the basic legal requirements in place,” the group’s treasurer, Chris Maltby, said at the time.

On Friday, a Lendlease spokesman said: “We’re pleased to have partnered again with Infrastructure NSW on stage one of the Sydney Football stadium redevelopment project.

“Building social infrastructure in partnership with government is a source of pride for Lendlease and we look forward to supporting future projects.”

Berejiklian opened the new $360m Parramatta stadium built by Lendlease in mid-April.