Port sale could fund Melbourne rail: PM

Billions of dollars in federal funding set aside for the East West Link is unlikely to be spent on the Melbourne Metro rail project, the prime minister has indicated.

Tony Abbott says he is happy to discuss the state government's proposed Western Distributor as an alternative for the $3 billion earmarked for the scrapped road project.

"We're happy to fund urban public transport projects through the assets recycling initiative and the state government, to its credit, has indicated it's going to sell the Port of Melbourne and that should attract some federal government asset recycling money," he told 3AW radio.