$1b on scrapped Link not a waste: govt

Victorian Treasurer Tim Pallas has denied his government wasted $1.1 billion by tearing up contracts for the East West Link.

It comes a day after a report by acting Auditor-General Peter Frost was deeply critical of the state Labor and Liberal governments' handling of the costly project.

Although the properties acquired as part of the project could be resold for about $320 million, the report found Victoria will ultimately be slapped with a $1.1 billion bill for its cancellation.

"I accept that Victorians are angry, shocked, and surprised," Mr Pallas told 3AW radio on Thursday.

"(But) $1.1 billion is not wasted money. That is not correct."

Shadow treasurer Michael O'Brien - who was treasurer in the Napthine government - says it was not in the state's interest to continue to the end of the tender process.

"It would have been a huge embarrassment to the state of Victoria and would have exposed the state to damages," he told ABC radio on Thursday.