The opposition is calling on Attorney-General George Brandis to step down over claims of potential corruption over a deal with WA's government.
Shadow attorney-general Mark Dreyfus has vowed to use "whatever parliamentary processes are available" to uncover exactly what transpired in a deal stuck with Western Australia's government, and if proven, says Senator Brandis should be removed from his position.
The deal reportedly struck between the commonwealth and WA allowed the state to claw back $1 billion from Alan Bond's collapsed Bell Group earlier this year.
But the arrangement was torpedoed in the High Court following submissions by then solicitor-general Justin Gleeson on behalf of the Australian Taxation Office, in defiance of a direct order from Senator Brandis, The West Australian reported on Friday.
It led to a toxic fued between the then solicitor-general and his boss, which resulted in Mr Gleeson stepping down.
Senator Brandis had reportedly instructed Mr Gleeson not to run a certain constitutional argument against WA but when the ATO later approached the solicitor-general he provided it to them.
Mr Dreyfus says if correct, it is "as clear a case of corruption as one could imagine".
"It's attempting to favour the West Australian Liberals over the interests of the Commonwealth," he told Sky News.
"That's the one thing that no commonwealth attorney-general should even countenance doing and that's why this story is so disturbing."
Mr Gleeson's advice to the ATO was given just weeks before the attorney-general issued a directive demanding all requests for advice from the solicitor-general first be approved by him.
Senator Brandis was forced to drop the controversial directive earlier this month under immense political pressure from Labor, the Greens and crossbench MPs.
Mr Gleeson later resigned, saying his professional relationship with Senator Brandis was irretrievably broken.
Meanwhile, WA Attorney-General Michael Mischin on Friday denied he had a deal with his federal counterpart to keep the Commonwealth out of the state government's bid to claw money from the Bell Group.
His denial came despite WA Treasurer Mike Nahan telling parliament the day after the High Court shot down the Bell Group legislation in May that the state government thought it had a deal.
