Govt wins with Labor regional 'rort' probe

The government has scored a political win with a parliamentary inquiry set to probe if a Labor MP misused funds from a regional development scheme.

The government has accused Labor of rorting taxpayers' money in administering the Regional Development Australia Fund when it was in government.

It's demanded an apology from Catherine King for misusing money from the fund to approve projects only in Labor-held seats when she was regional minister in 2013.

An Australian National Audit Office report found 80 per cent of the projects denied funding by Ms King were from coalition-held seats, while more than half those funded - against advice - were in Labor-held seats.

Ms King has denied any wrongdoing.

Parliament's joint public accounts committee on Thursday announced it would investigate the report, citing several issues in need of further scrutiny.

Among them were the claims of electoral favouritism.

The committee is made up of majority coalition members and is chaired by Liberal MP Andrew Southcott.

Public hearings will be held in early 2015.