Prime Minister Tony Abbott has once again urged Victoria's premier to build the controversial East West Link, claiming dumping the road project could damage future infrastructure opportunities for Australia.
In a letter to Premier Daniel Andrews, leaked to media on Wednesday night, Mr Abbott says investor confidence will be damaged and private sector investment jeopardised if the Victorian government legislates to avoid paying compensation over the $6.8 billion road tunnel.
"Your government's treatment of the East West Link project risks setting a dangerous precedent," he wrote, claiming national and international companies had raised concerns.
"It is unprecedented for a state government to fail to honour a contract to build transport infrastructure and take the radical step of legislating away existing contractor rights associated with building the project."
Mr Andrews, who has not ruled out legislating to avoid compensation, also responded to Mr Abbott's letter on Wednesday night.
He confirmed his position on the road, saying "Victorian Labor honours its promises".
"While I note you have broken significant election promises ... my government will be one that honours its election commitments in full," Mr Andrews wrote.
"I look forward to working with you over important infrastructure projects, but no amount of hysteria or attempted bullying or blatant politicking will change the result of the 2014 Victorian election."
Mr Andrews vowed to dump the East West Link if he was elected in November, but the former coalition government penned contracts with the East West Connect consortium in September.
Labor continues to negotiate with the consortium, with reports Victoria could be forced to pay them up to $1.1 billion in compensation for scrapping the road.
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