New Zealand made the final of the Oceania qualifying tournament in June but semifinal opponent Vanuatu protested that South African-born defender Deklan Wynne didn't meet FIFA eligibility criteria.
New Zealand Football said Friday it had legal advice recommending an appeal to the Oceania Football Confederation, but felt there was too great a risk to other players from pursuing the case.
Media reports in New Zealand suggest that as many as 18 players who have represented New Zealand from under-17 to senior level in recent seasons may have been similarly ineligible.
"One of the key reasons the decision has been made is to mitigate any risk such an action might have on other players who have represented New Zealand under the same interpretation...and any further action from the OFC," NZF President Deryck Shaw said.
New Zealand insists it acted properly in playing Wynne against Vanuatu, because the tournament team list had been vetted and approved by the organizers of the Pacific Games in Papua New Guinea, of which the Oceania qualifiers were a part.
Under FIFA regulations, Wynne needed to have lived in New Zealand for five years from the age of 17 to qualify to play for New Zealand. While Wynne, now 20, moved to New Zealand with his parents aged 14, he has not completed the five-year residential period from the age of 17.
New Zealand sought to apply a separate statute, amended in 2008, which allowed for a shorter period of residency but which was meant for players born with dual nationality.
"We want to secure the opportunity for young people who have moved to New Zealand with their families as children and young adults for non-football reasons to play the game they love in New Zealand and represent their adopted country — something the statutes never intended to prevent," Shaw said.