Sir Laurence's verdict cannot be appealed, which means the classified report will not have to be disclosed until 2016, when Cabinet documents are made public under the territory's 10-year rule.

Chief Minister Jon Stanhope has repeatedly refused to release the report on the grounds that it was Cabinet in confidence. His argument was upheld this morning, when Sir Laurence's verdict was circulated among the Assembly's members.

Sir Laurence's reasons cannot be published until the Assembly authorises it, which cannot happen until the Assembly sits again on May 5.

The functional review, written by then Actew managing director Michael Costello, was prepared ahead of the 2006-07 budget and led to cuts to the public sector, increased taxes and levies and school closures.

The arbiter position was one of the initiatives the ACT Greens bound the Government to establish in the agreement forged by the two parties after last year's election. Sir Laurence's appointment is not ongoing, and a different arbiter could be appointed the next time a claim of privilege is challenged.

Although there is a Legislative Committee inquiring into the school closures, it cannot compel the Government to table the Functional Review.

Sir Laurence, 82, became a judge of the NSW Supreme Court in 1965, and was chief justice from 1974-89. More recently he has been a commercial mediator and an independent legal arbiter for the NSW Legislative Council.