Melbourne rail loop funding scrap sets up poll showdown

Melbourne's controversial Suburban Rail Loop is shaping as a key federal election issue in Victoria, after a senior coalition MP called on Prime Minister Anthony Albanese to pull the plug.

Liberal frontbencher Dan Tehan has stirred the pot with a plan to introduce a petition to federal parliament calling on the Labor government to withdraw support for the loop and reinvest its previous $2.2 billion pledge in regional Victorian roads.

The Wannon MP said debt-laden Victoria couldn't afford to build the 90km orbital rail line from Cheltenham to Werribee via Melbourne Airport.

"They (Victorian Labor MPs) know that the responsible thing to do for Victoria is to take that money and put it into the roads," Mr Tehan told ABC Radio Melbourne on Monday.

The Victorian government has pledged $11.8 billion to build the $34.5 billion eastern section, with a third of funding expected to come from the federal government and the rest from unexplained "value capture" revenue.

Mr Albanese committed $2.2 billion in Commonwealth cash to the project before the 2022 federal election but has made no further pledges, leaving a $20 billion hole.

Federal Opposition Leader Peter Dutton has offered conditional support for the rail loop project if the coalition returns to power at the next election due by late May.

"We're happy to provide support to projects, but not if the state government has no hope of putting their own money in," he told Sky News.

"If I entered into any agreement with (Premier) Jacinta Allan at the moment, I'd want to see the colour of their money first."

Ms Allan said the federal coalition was not listening to Victorians, who endorsed state Labor's plan to build the rail loop at the 2018 and 2022 state elections.

"I really want to thank Dan Tehan ... for so soon, so early before the federal election, giving Victorians a very, very clear choice," she told reporters.

"A clear choice between a Labor government who has backed the Suburban Rail Loop ... or a Liberal outfit who's going to repeat the pattern of the past and gut Victoria from billions and billions and billions of infrastructure funding."

Victorian Opposition Leader John Pesutto said the state coalition was, in principle, on the same page as Mr Tehan.

Despite the Allan government signing $3.6 billion and $1.7 billion tunnelling contracts, Mr Pesutto maintains he won't rip up the deals unless there is an out.

"We want (the loop) scrapped too but we need to look at the contracts," he said.

"We don't know what Premier Jacinta Allan is signing the state up to."