FORMER NSW premier Bob Carr’s most senior bureaucrat decided two years ago the leaking of cabinet documents to the Cross City Tunnel consortium did not need to be investigated by the state’s corruption watchdog.

Mr Carr maintained yesterday that he was not aware of the leak, which happened before the lucrative contract was signed and that exposed taxpayers to a $12 million blowout on the tunnel project.

“They were aware of their legal obligations; the ICAC Act makes it an obligation on a public official on hearing a credible allegation of corruption, to see that it goes to ICAC,” Mr Carr said.

His successor, Morris Iemma, said yesterday Premier’s Department director-general Col Gellatly found in 2003 no grounds for referring the leak to the Independent Commission Against Corruption.

The leak was raised in a letter sent from then roads minister Carl Scully to then planning minister Craig Knowles on December 3, 2003.

The letter was among 30,000 pages of documents tabled in parliament by the Government on Melbourne Cup day.

The leaked document set out the Government’s negotiating position on the cost of relocating ventilation stacks, giving the Cross City Motorway Consortium a tactical advantage in its negotiations with the Government over costs.

Mr Iemma refused to say whether Dr Gellatly had informed Mr Carr. He also refused to say whether he would expect Dr Gellatly to keep him informed of such matters.

Speaking from Hobart where he is attending an energy ministers’ conference, Mr Scully said that “given the material that was bought to my attention and the requirement I made for it to be investigated by no less than the head of the Premier’s Department, it was appropriate conduct by me.”

“I thought it was inappropriate and required further investigation.”

In a memo written yesterday, Dr Gellatly said his recollection was that in early December 2003 he became aware of concerns by the Roads and Traffic Authority and Mr Scully that some material to be considered by cabinet may have been made available to the Cross City Motorway Consortium. He wrote that there was concern that the Sydney Harbour Foreshore Authority had given the material or information to the consortium.

He said he raised the allegation with SHFA head Rob Lang who emphatically denied the allegation.

“As I had no grounds to give any credence to the allegations, I had no reason to refer the matter to ICAC,” Dr Gellatly said. “At the time, the RTA’s allegations appeared to be based on nothing more than hearsay and an internal dispute between agencies.”

Mr Iemma said his Government would co-operate with an investigation after the leak was referred to ICAC yesterday by Nationals leader Andrew Stoner.

“As these events are now being considered by ICAC, it is inappropriate for me to make any further comment on the matter,” he said.

“ICAC is the body established to examine these issues. I am not going to provide a running commentary on matters before ICAC.”

Opposition Leader Peter Debnam said the guidelines were “absolutely straightforward — when you run across an occurrence like this it should be referred to ICAC”.

“I think these documents and all the other documents are starting to tell us that this Government is rotten to the core,” he said.

“Everything about this contract and the deal stinks.

“The suggestion that people did not know about the allegations is simply unbelievable.”