No end in sight for $1.5b funding row

It has emerged as a $1.5 billion question, and despite "frank" face-to-face talks between the Victorian and federal governments, it is no closer to being answered.

Both the 2015-16 federal and Victorian budgets claim ownership of $1.5 billion of funding allocated to Melbourne's scrapped East West Link tollway.

Federal Treasurer Joe Hockey met with the Victorian government on Friday to personally deliver the message contained in Tuesday's federal budget - give the money back.

"It was a frank discussion, as you would expect," Mr Hockey told reporters later after flying out to Launceston.

"What we both understand is that we want more infrastructure built in Victoria.

"But we're at a different point to each other in relation to the $1.5 billion he's holding on to. That's our money and we're going to continue to discuss the matter."

Mr Hockey said he was incredibly disappointed about East West not going ahead and $3 billion - the total federal contribution - would be set aside for a Victorian government that would proceed.

The claw back is complicated by Transurban's unsolicited $5.5 billion Western Distributor proposal, now under assessment. It would need a federal contribution of about $1.5 billion.

Prime Minister Tony Abbott has signalled he could support this new congestion-busting tunnel and tollway linking Melbourne's Westgate Bridge to Citylink should the business case stack up.

The Victorian government is adamant it will keep its election promise to scrap East West Link and the $1.5 billion is needed for alternative road projects approved by the federal government.

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