This week it emerged that some of the Arts Council's cash may not have been applied as originally stipulated.
Arts Council of Wales lottery director Robert Edge said although it had not yet reviewed all the evidence, the council believed it had grounds to ask for some of its money back.
Edge said: 'Although it appears the festival organisers did almost everything they set out to do, there are clearly areas that we cannot tie-up and in the interests of public funding we are attempting to retrieve some of the funding.'
The dispute is understood to revolve around the marketing of the festival, specifically relating to unpaid bills for radio and press advertising.
However, the Arts Council will have to join a list of creditors, who are understood to be trying to recover around£100,000, if it is to have any chance of retrieving their money.
The festival liquidators, Welsh firm Stones & Co, declined to comment on how much money had been recovered or when creditors could expect to be paid.
Cardiff closed last August after losses hit the 30-year-old event. Festival chair Joan Lofts blamed closure on the decision by the rival Annecy Festival to become an annual, rather than a biennial, event, and the timing of The Second Children's World Summit on Television, staged two months before Cardiff.
A lack of US support badly affected the show.