Vic Link side letter drafting contested

The consortium building Melbourne's controversial East West Link drafted its own letter of comfort, Treasurer Tim Pallas says.

The letter said if the contract was found to be invalid, Victorian taxpayers would still pay the compensation for not building the $6.8 billion road tunnel project.

But former treasurer Michael O'Brien says a law firm working for a government agency drafted that side letter - not building consortium East West Connect.

Mr Pallas said East West Connect came up with the original draft, which Mr O'Brien signed.

"I'm not suggesting the first draft was necessarily the final product, but they sought it, that is they sought to draft their own assurances," Mr Pallas told reporters on Thursday.

The government has been negotiating with East West Connect to get out of the deal, which reportedly has up to $1.1 billion in compensation clauses.

Mr O'Brien said a Treasury briefing note showed law firm Clayton Utz prepared a draft form of the side letter.

"Clayton Utz did not act for (East West Connect); it acted for the government," he said.

The government is drafting legislation to avoid paying the compensation bill, after promising before the state election the contracts weren't worth the paper they were written on.

Mr O'Brien said that decision showed Labor's claim the contracts weren't lawful was false.

"The contacts have never been declared invalid," he said.

When asked if he would refer the former government for investigation over the East West Link contracts, Mr Pallas said there were a number of government bodies that could investigate.

"I'm sure given the size and enormity of these matters they will be the subject of very substantial scrutiny over time," he said.

Mr Pallas also said the government had moved to financial close on the contracts just four days after signing the contracts, when it could have legally waited until after the election.