A meeting held in Sydney on Tuesday between Police officials, representatives for Police Minister David Elliott and NHW representatives has been described as 'very positive' by NHW State President Bill Hackney.

"We're hoping for a successful outcome - best case scenario the Attorney General's department will pay for the insurance cover," Mr Hackney said.

The state's 120 NHW groups ceased operating after they were left without insurance cover following a restructure of the Treasury Managed Fund which covered all NSW Police public liability insurance which filtered through to Neighbourhood Watch.

As a result grass roots crime prevention has taken a hit as local watch groups now have no insurance to cover public events it holds including fundraising barbecues, letterbox drops - anything that needs a certificate of currency.

"We met with NSW Police Minister David Elliott's advisers and we're pretty excited about the future," Mr Hackney said.

"There was no resolution given about the public liability insurance but we hope to have an outcome by the end of the week. If not, all groups will have to raise enough money to get their own cover."

Mr Hackney had put out a call to the business community to help but to no avail which he said was disappointing.

Despite the setback he is adamant groups will be up and running soon. "This is just a small hurdle which we will overcome," he said.

"We have a lot in the pipeline and the organisation has a bright future even though police are no longer operating in a caretaker role for us. This is probably one of the most positive things to happen to NHW NSW in its 35 years of operating.

"We now have the opportunity to move forward as an organisation," Mr Hackney said.