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Folau, Rugby Australia mediation still on

Israel Folau and Rugby Australia will continue their marathon efforts over the phone to find a settlement ahead of a looming court battle over his sacking.

They could not reach an agreement after 12 hours of mediation in the Federal Circuit Court in Melbourne on Monday. Negotiations will resume at 11.30am on Wednesday.

On Tuesday the court revealed the next step in negotiations will continue over a phone hook-up.

Folau's lawyer George Haros says they remain "hopeful to reach an amicable agreement".

"Where we stand is that mediation remains on foot," Mr Haros said on Monday night.

"We'd like to thank the Federal Circuit Court for today's effort and look forward to reconvening in a few days to see if we can strike an agreement."

Folau claims he was wrongfully dismissed by Rugby Australia and Rugby NSW after a controversial Instagram post in April condemning "drunks" and "homosexuals" and warning "hell awaits" them.

"I understand that not everyone shares my faith and some find it difficult to reconcile with their own beliefs," Folau said in a video posted on his website before the meeting.

"I want to be clear that I only share passages from the Bible as a gesture of love."

The former rugby league and AFL player last week increased his compensation claim from $10 million to $14 million, and said the Wallabies would have performed better in the 2019 Rugby World Cup if he was playing.

However, RA chief executive Raelene Castle said she had been sent messages and emails from the rugby community supporting the decision to sack Folau.

Ms Castle said a tribunal found Folau had committed a high level breach of his contract.

"Israel admitted he had caused harm with his comments and stated that he would not curb his social media use and will post whatever he likes whenever he feels the need to share his views," she told reporters outside court earlier on Monday.

Folau is a hardline Christian who also recently claimed fatal bushfires were God's punishment for legalising abortion and same-sex marriage.

© AAP 2019