The future of a landmark social housing project lauded around the world remains under a cloud with the Victorian government refusing to commit to a new funding model amid a dip in overall homelessness funding in Tuesday's state budget.

The Common Ground project in Melbourne's Elizabeth Street, established with much fanfare in 2010 with the support of global construction scion Daniel Grollo, has been locked in tortuous negotiations with Housing Minister Wendy Lovell's Department of Human Services for months, with no guarantee that current funding rates would be maintained or boosted.