Malcolm Turnbull says Labor is spreading "conspiracy theories" over Attorney-General George Brandis' dealings with the West Australian government over the Bell Group.
Labor has accused Senator Brandis of being at the centre of a "kickback scandal" over a reported deal with Western Australia to allow the state, rather than the Australian Tax Office, to claw back $1 billion from Alan Bond's collapsed Bell Group earlier this year.
"The conspiracy theories, the falsehoods that are now being spread by the opposition are all at one with their general approach ... the leader of the opposition cannot be trusted on any matter of fact," Mr Turnbull told parliament on Monday.
The Attorney-General says every decision he made in relation to the Bell Group liquidation had protected the interests of taxpayers.
Senator Brandis responded in parliament on Monday to questions about a supposed deal with Western Australia to allow the state, rather than the Australian Tax Office, to claw back $1 billion from Alan Bond's collapsed Bell Group earlier this year.
"Every decision I made in this matter protected the interests of the commonwealth, by supporting the decision of the ATO to intervene in the matter, and deciding to accept (solicitor-general) Mr Gleeson's advice that the commonwealth of Australia should also intervene in the matter, " Senator Brandis told parliament.
Senator Brandis said it had been put to him that the ATO not take part in the case.
"I should stress that that was never a view I arrived at, it was merely one option among several which I wanted to test with (Minister for Revenue) Ms O'Dwyer," he told parliament.
"In fact, after my discussions with Ms O'Dwyer and (second tax commissioner) Mr Mills, I arrived at the firm conclusion that it was desirable that the ATO should intervene, to protect the interests of the commonwealth."
This was notwithstanding discussions between WA treasurer Mike Nahan and then federal treasurer Joe Hockey about quickly settling the commonwealth's claim in the wind up of Bell.
Senator Brandis said he had no knowledge of the discussions between the two treasurers until March this year, but in any case did not believe there was an agreement between WA and the commonwealth.
"The only written record of those dealings ... do not, in my view, constitute or evidence such an agreement," he said.
Before Senator Brandis even finished his statement, Labor called on the prime minister, treasurer, finance and social services ministers to provide to parliament a full account of their involvement.
"We know there has been corruption, what we don't know yet how many of them were involved," manager of opposition business Tony Burke said in moving a motion in the lower house.
Senator Brandis said he had accepted the advice of the then solicitor-general Justin Gleeson on intervening in the case.
And there was never any agreement between him and his WA counterpart in relation to the High Court proceedings.
"I was not involved in, and at the time they took place had no knowledge of, the discussions between Mr Hockey and WA ministers," he said.
"Nor did Ms O'Dwyer. Mr Hockey never mentioned them to me.
"The only commonwealth ministers with whom I have had discussions about this matter are Ms O'Dwyer and (cabinet minister) Mr Porter."
Labor frontbencher Penny Wong said it should not have taken a story in The West Australian newspaper to flush out the full details.
"He throws Joe Hockey under a bus ... how convenient," Senator Wong said.
Senator Wong said she suspected the prime minister had told Senator Brandis to explain himself.
There were still questions left unanswered.
"If you've got hundreds of millions of dollars being provided to the West Australian government under a political deal, how is it possible the cabinet isn't informed?" Senator Wong asked.
