The UK government has offered to share the financial risk for Glasgow's Commonwealth Games bid in 2026.
However, it has rejected a request by the Scottish government to underwrite the entire cost of the Games.
BBC Scotland has seen a letter from UK sports minister Stephanie Peacock to the Scottish health secretary Neil Gray which outlines her backing for "an additional contribution of up to £2.3m" to be provided for the event.
She then states it would be her "strong preference" that the Scottish government match that figure, which would help cover any increase in safety and security costs if terror threat levels rise before the games.
According to the letter, Gray told the UK government in August that Glasgow hosting the Games would be "contingent on the UK government providing a full, uncapped underwrite of financial risk connected to the event".
In her response, Peacock writes that the "justification for your request... is less clear" and that the UK government "cannot commit to fully underwriting the risk for an event the Scottish government has committed to host".
She added an underwrite had not been requested by Commonwealth Games Scotland and that around £27m is already earmarked as a contingency fund.
Peacock's letter also stated none of the proposed funding could be used "to enhance the concept or ambition of the Games", seemingly in response to a suggestion from Neil Gray that some of the extra money could go towards bolstering the stripped-back event.
The Scottish government has been contacted for comment.
The first minister John Swinney previously told newspapers that public funds would not be used on the Games.
Glasgow hosted the Games in 2014, but the 2026 event would be scaled down after years of difficulty for the competition. It would feature between 10-13 sports, instead of the 18 that took place in the 2014 edition.
Victoria in Australia was originally slated to host but pulled out in 2023 due to financial issues.
Organisers have since scrambled to find a replacement, with Glasgow suggested earlier this year.
Commonwealth Games Scotland previously stated their proposal would involve "no significant ask of public funds" and that to save money only four venues would be used – including Scotstoun Stadium and the swimming pool at Tollcross.
However, Glasgow City Council is currently trying to manage budget cuts, raising questions over whether there is an appetite among people in the city to host the event again.
Last month, Commonwealth Games Scotland warned that it would be a "a travesty" if the competition was not hosted in Scotland, saying turning down the opportunity could also impact the future of high-performance sport in the country.