"We now have the American congress breathing down our neck, considering that they have been misled," said Federal Labor Leader Kim Beazley.
"That is a very bad position to be in.”
"(Prime minister) John Howard needs to be able to go to the United States, and the rest of the world, and say all the possibilities of this are being properly examined," he said.
Mr Beazley said the role played by government ministers and departmental heads fell outside of the scope of the current Cole inquiry.
Mr Beazley also said Labor was yet to decide on what reforms, if any, of Australia's wheat exports should occur.
His comments followed a demand by Norm Coleman, the chair of a US Senate committee into illegal payments to Saddam Hussein's regime, for Australia's ambassador to Washington, Dennis Richardson, to explain the Howard government's role in the wheat
affair.
It followed claims that Australia’s former ambassador to the United States, Michael Thawley, had intervened in 2004 by asking the Senate committee to drop an investigation into the alleged kickbacks.
Senator Coleman said he was "deeply troubled" by an apparent attempt to cover up the scandal.
A group of U-S senators has also demanded the suspension of AWB from an export credit scheme and another senior American politician has written to the Australian ambassador in Washington to raise his concerns.
The concerns have been echoed by American wheat exporters.
“We hope that his [Senator Coleman’s] investigators will pick up where they left off in considering an investigation into AWB, because US Senators don’t take kindly to being misled,” Dawn Forsythe of US Wheat Associates told SBS World News.
Inquiry fair
The Commissioner heading Australia’s inquiry into the scandal has rejected claims the inquiry's been unfair to AWB and suggestions that its investigation has been biased.
Cmmr Terence Cole says there's been no unfairness either to AWB or to any witness in the processes used by the inquiry or in the way it's been conducted.
AWB's lawyer James Judd has accused the inquiry of taking evidence in secret from former AWB employees and of ridiculing the evidence of some witnesses.
Mr Judd has asked Mr Cole to order that transcripts of secret evidence be made available to AWB and that witnesses be treated with courtesy.
But Mr Cole threw out the submission on Thursday morning.
Three whistleblowers are expected appear before the inquiry later today.