Emirates Team New Zealand’s campaign to win the 35th America’s Cup in Bermuda appears to be back on track after its title sponsor confirmed that it would continue to back the team.

Emirates airline revealed yesterday that it will return as the team’s major sponsor for the third time for the sailing spectacle, which will be held on the Island in 2017.

The announcement comes as Emirates Team New Zealand faces the prospect of going into the biggest event in the sailing calendar without government funding.

Grant Dalton, the Emirates Team New Zealand chief executive, who has been scathing of the decision by the America’s Cup Event Authority to hold the America’s Cup in Bermuda, described the latest development as encouraging.

“We have made considerable progress because the Emirates Team New Zealand brand is an international leader, well recognised in the sport,” he said.

“Emirates airline has been with the team since 2004 and their decision to stay with us is important. We are fortunate to have such loyal and committed sponsors.”

A report by ABC News today said there had been speculation that Emirates might not return as the team’s top sponsor, perhaps forcing the Kiwis to drop out.

However, the airline’s decision to stick with Emirates Team New Zealand could now encourage the team’s other long-term backers to recommit for 2017.

“It’s a brick in the wall but a significant one,” Mr Dalton added.

Emirates Team New Zealand looks set to lose its government funding because America’s Cup officials pulled the qualifiers from Auckland during a spat over changing the size of the boats in the middle of the cycle.

That dispute led to the withdrawal of Luna Rossa, but the Italian team has since been replaced by SoftBank Team Japan, whose skipper will be Dean Barker, the New Zealander who could only watch helplessly as Oracle clawed back from an 8-1 deficit to successfully defend the “Auld Mug” in San Francisco in 2013.

The addition of the Japanese team to the mix left only the involvement of Emirates Team New Zealand as a question mark in the challenge against Oracle, especially after New Zealand Prime Minister John Key declared on national radio last month that “the end of the road” had come for government investment in the team.

Sir Tim Clark, Emirates’ president, said in a statement that the decision to renew a relationship that began in 2004 was recognition of the success of Team New Zealand in helping to build the Emirates brand globally.

“Our recommitment for the next America’s Cup challenge is testament to the spirit, skill and strengths the team has shown,” he said. “Our investment in Team New Zealand is one of the reasons Emirates has continued to soar in brand recognition.”

Emirates Team New Zealand’s first outing in the next campaign is an America’s Cup World Series event, sailed in the smaller, one-design AC45 catamarans, in Portsmouth in July.