A week after letting him stand down from football indefinitely to confront bipolar disorder, Parramatta are heading towards a dispute with troubled halfback Tim Smith about paying out the remainder of his contract.

The Eels are yet to formally release the 23-year-old but the size of his settlement is certain to be discussed at a board meeting tonight.

The Herald understands they are already on a collision course with Smith's manager, David Riolo, over how much the former rookie of the year should be compensated.

It is believed that Smith - who is contracted until the end of 2009 for about $250,000 a season - expects to be paid for the remainder of this year and 25 per cent of next season, as stipulated in the standard NRL player's contract for those who suffer permanent injury.

But there are murmurs Parramatta will baulk at that figure because of the service they received from Smith since the start of this year's contract.

Smith has played only three matches this season and the Eels believe they have been sympathetic to his mental problems - including supporting him while he was in rehab late last year after a string of alcohol-related incidents.

Parramatta chief executive Denis Fitzgerald last night denied the club was in dispute with their former halfback but he wanted to meet Riolo this week to discuss a pay-out.

"We haven't had any formal discussions with David since Monday, when we agreed to let Tim take indefinite leave," he said. "I intend to meet him in the coming week because we're keen to talk about where Tim is at.

"There were reports last week that we were going to release him. And then we were going to sack him. Neither of them are right. We haven't spoken about it yet because we were more concerned about Tim's welfare.

"But we will move on it this week. We would like it to be as soon as possible to see what Tim's thinking."

Asked if he wanted to find a new halfback to replace Smith this season, Fitzgerald replied: "We won't be looking for another halfback for this year."

Asked if that meant he would not seek salary cap relief, he said: "I'm not saying that. If cap relief becomes available, we will be applying for it."

Riolo was not available for comment yesterday.

The continuing saga about Smith and his future at the club is bound to complicate the Eels' attempt to re-sign playmaker Brett Finch.

Finch has indicated that he wants to give Parramatta every chance of retaining him, and Smith's shock announcement last Monday that he was quitting the game immediately raised hopes Finch would stay because Smith's departure could free up as much as $300,000.

There has also been speculation hooker Mark Riddell would ask for a release if he received a formal offer from English powerhouse Wigan.

But with two formal offers from NRL clubs and three from the UK Super League, there were fears amongst some Eels officials last night that they were about to lose Finch, who has not received an offer from his current club.

"He doesn't have to put pen to paper in the next few days," Fitzgerald said. "Brett's been sympathetic to Tim's cause all along. Although we understand him wanting to sort out his future."