Mining millionaire Nathan Tinkler will be footing a legal fees bill to the tune of $500,000, despite failing in his bid to buy the Newcastle Knights.

Tinkler agreed to pay the fees at the beginning of the process as the Knights are cash-strapped, and although the deal has fallen through, he has said he will honour it.

The mounting cost was one of the reasons he pulled the pin on his offer on Monday, as the Knights still had not made a decision.