Vic stays out of federal link funds fight

Victoria isn't buying into argy-bargy over federal threats to take back money meant for the axed East West Link toll road.

The federal budget demanded the return of $1.5 billion handed to Victoria for the dumped road tunnel, but Victoria has refused to pay it.

Deputy prime minister Warren Truss issued a veiled threat to the state after Premier Daniel Andrews said the money was staying in Victoria.

"When it really comes to the bottom line, we pay the Victorian government in a year a lot more money than they pay us," Mr Truss told ABC radio on Thursday.

But with the East West Link dead, and a new road project looking set to take its place, the Andrews government said it wasn't interested in buying into an argument over the funds.

A government spokeswoman said its position had not changed since Wednesday, when Mr Andrews said: "We're not giving back any money."

Despite saying Victoria has an obligation to return the money, Mr Truss - who is also infrastructure minister - said he was prepared to have constructive talks with the Victorian government about a new program of works.

Mr Abbott recently agreed to put $1.5 billion towards a proposed Western Distributor road if the business case stacked up, but has asked for a further $1.5 billion due to go to Victoria to be handed back.