Fairfax Media understands the Sea Eagles haven't given up hope of having their submission approved by the governing body, confident they have the medical support to justify the clearance that provides salary cap dispensation.

Under the NRL rules, a club will be granted an exemption from the salary cap if it is able to prove a player has been forced into retirement by a one-off injury.

However, the NRL last week rejected Manly's submission for Stewart and is now examining the case put forward by the recently retired Steve Matai.

The Sea Eagles have moved to appeal the NRL decision, determined to have Stewart's big-money contract removed from this year's salary cap and thus allowing them to pursue a couple of players for this season.

The man in charge of the decision is NRL chief medical officer doctor Paul Bloomfield, who spent 13 years at Manly between 2000 and 2012.

Bloomfield is well aware of the medical histories of Stewart and Matai and in the case of the retired fullback could not be convinced the knee injury that forced him into retirement wasn't pre-existing.

While Stewart has had a career-long battle with horrific knee injuries, Manly will argue his latest setback - which required surgery - is the cause of his inability to return to the paddock.

It is the same submission put forward last year by their former premiership-winning teammate Anthony Watmough, who collided with Beau Scott during a Parramatta Eels pre-season training session leading into the 2016 campaign.

The NRL accepted Watmough's submission, however it is still held up by the insurer - delaying the pay-out for the former international and Origin forward.

It is believed because the Eels were able to point back to the moment Watmough was injured, they were granted the exemption by the NRL.

However it is understood Manly haven't been able to pinpoint the incident that led to Stewart's retirement.

The Knights successfully argued a medical retirement clearance for Kade Snowden last year and had his contract removed from the salary cap.

The North Queensland Cowboys are understood to have been given a 20 per cent reduction of Brent Tate's contract from the salary cap after suffering a career-ending knee injury during the 2014 Origin series.

Like Matai, the 31-year-old Stewart hasn't been able to train with the team since undergoing surgery to repair the knee injury that restricted him to just 11 games in 2016.

The two-time premiership winners both had one year to run on their respective contracts with the Sea Eagles, however injuries have now seen them join former skipper Jamie Lyon in hanging up the boots after a disappointing year.

Matai only managed eight games for the Sea Eagles last season, hampered by neck and shoulder complaints. It is unclear whether the NRL will reject Matai's submission, however the Sea Eagles are confident both of their retired veterans have the medical support to be granted the cap exemption.

The Sea Eagles have been and will continue to pay the two club legends for the remainder of their final year, however it is salary cap dispensation they are after.