The 1986 Stawell Gift winner has fears the event could be in grave danger.

A funding dispute between Stawell Athletic Club and the Victorian government has left the gift, which started in 1878, in jeopardy.

Race organisers rejected a $280,000 bail out from the state government to support the 2020 gift and are yet to decide how the event will be financially supported.

As part of its proposal, the government recommended a new board of management with representatives from Stawell Athletic Club, the council, Victorian Athletic League, Grampians Tourism and independent members with expertise in event management and marketing.

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Mr Chapman said it would be an "absolute tragedy" if it was to fall by the wayside.

"Obviously without knowing the specific details, I don't understand that if we've got an offer on the table that the Stawell Athletic Club is in any position to jeopardise the future of that iconic event," he said.

"If they're (the state government) supporting the event and putting their money up, they want to have some control and make sure everything is running the way it should.

"I'm in full support of that. They have to bring the Stawell Gift into the 21st century and I can only see it being a positive.

"It's ($280,000) certainly enough to maintain the Stawell Gift in its current format.

"It's a name and an event that most people are aware of. They probably don't know who has won the race similar to the Melbourne Cup, but it has been around for nearly 150 years and it's iconic, especially to Victoria and a lot of people in Australia.

"They can't jeopardise that history.

"I go every year and they still draw 10,000 or 15,000 people to that event.

"When I was running as an amateur, they would get 300 people to the Australian titles.

"Once it's gone, I can't see how they can get it back."

Mr Chapman said he had been in contact with a number of people involved in the event, including 2014 winner Luke Versace, who quit as patron after claiming organisers had put themselves before the event.

"Fingers crossed we might have a last-minute reprieve, but it's looking pretty dire," Mr Chapman added.

"The current Stawell Athletic Club have a lot riding on their shoulders and what a legacy they're going to be leaving if the gift is disbanded in its current format.

"I don't understand how we can get to this place at the moment.

"We'll see what happens in the next few days because that's all we've got."

Wodonga's Jarrem Pearce, still the youngest man to win the Stawell Gift when he captured the prestigious race in 2000, is hopeful it will be resolved.

"It would be a massive shame," he said.

"I'd struggle to believe it wouldn't run. It survived two wars and I would think it could find some funding again.

"It's always been a well attended event and it's still the pinnacle of pro athletics in the country.

"The whole carnival is six months and has hundreds of participants and that's the pinnacle at the end, that's the grand final."

Mr Pearce admitted it's a changing world with so many other sports available, but said athletics was far from dead and buried.

"If people are fearing the future of athletics, they need to go down to the Wodonga little athletics track and see the kids down there," he added.

The Victorian government issued a statement saying it remains open to the Stawell Athletics Club to accept its recommendations and associated funding support.