Labor MPs hound Turnbull over OzCar saga

Labor government ministers lined up in parliament to hound Opposition Leader Malcolm Turnbull over the OzCar affair on Tuesday.

Nearly 24 hours after a forged email caused the collapse of Mr Turnbull's case alleging Prime Minister Kevin Rudd had misled parliament, the government stepped up its calls for Mr Turnbull to apologise and resign.

While mystery still surrounds the fake email, which police suspect was fabricated by Treasury official Godwin Grech, Mr Turnbull admitted he had spoken to the public servant in the past two months.

"I mean Mr Grech is very well known and I have certainly spoken to Mr Grech. I know Mr Grech as I know many public servants in Canberra," Mr Turnbull told ABC radio on Tuesday.

The Nine Network reported on Tuesday night that coalition sources suggest Mr Turnbull and one other Liberal frontbencher had been communicating with Mr Grech for some time.

Federal police were continuing their investigation into the email, which they say originated in a computer in Treasury and was sent to Mr Grech's home computer.

ABC TV news reported police would question Mr Grech about a series of leaks from Treasury in the past year including adverse advice about the FuelWatch scheme and an email exchange between Reserve Bank governor Glenn Stevens and Treasury head Ken Henry about the bank deposit guarantee.

The report said that the ABC had been told by several Liberals that Mr Grech had been supplying information for Mr Turnbull "for some time".

It also said that Mr Grech had been an unofficial contact within Treasury for the Howard government, quoting one Liberal as saying: "He has been sympathetic to us for some time".

In parliament, the opposition directed its attack at Treasurer Wayne Swan, who they say misled parliament on June 4 about representations he made on behalf of John Grant, a Brisbane car dealer and friend of Mr Rudd.

A frustrated Mr Swan attacked Liberal MP Rowan Ramsey when he asked the treasurer how many car dealers he had spoken with personally.

"Of course, they weren't all dealt with by me, you moron," Mr Swan said before withdrawing the insult.

Questions from Labor MPs allowed ministers to attack Mr Turnbull's honesty and fitness for leadership.

Earlier in the day, during a visit to a building site at a Canberra school as part of the government's nation-building stimulus package, Mr Rudd continued to question Mr Turnbull's character.

"Mr Turnbull's integrity, I believe, has been fundamentally undermined and it is important therefore, that Mr Turnbull ... does the right thing and resign," Mr Rudd told reporters.

Mr Turnbull conceded in an interview early on Tuesday that the discovery of the fake email initially thought to link Mr Rudd's office to a request for help for Mr Grant, had made the argument unsustainable.

"Look, the case that Mr Rudd misled the house about the communication is not sustained. There's no doubt about that," Mr Turnbull said.

But he sidestepped questions as to how the opposition came to know about the email in the first place and the extent of contact between the opposition and Mr Grech before he confirmed the existence of the email in a Senate inquiry last Friday.

Both Mr Turnbull and opposition treasury spokesman Joe Hockey said they knew Mr Grech, with Mr Hockey saying he had left a message on the public servant's mobile phone on Saturday, concerned about his welfare.

Mr Grech had worked briefly as a departmental liaison officer in Mr Hockey's office when he was a junior minister some years ago in the Howard government.

In a coalition joint party room meeting early on Tuesday, Mr Turnbull pledged to "relentlessly" pursue Mr Swan saying the evidence that the treasurer had misled parliament was overwhelming.

"We must not be shy or reserved, our attacks are based on information. It's our job as opposition to continue the attack," Mr Turnbull said.

Car dealers were contacting the government after it decided to set up OzCar to provide finance to dealers after US providers GE and GMAC pulled out of Australia last October because of the global financial crisis.

Mr Swan told parliament that Treasury had dealt personally with many car dealers around the country and that Mr Grech, as head of the OzCar scheme, had sent 130 emails to the Treasurer's office about the matter.

But he was unable to say how many others had received his own personal attention.