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Australia PM faces calls to resign

Australia's Prime Minister Kevin Rudd faced calls to resign on Friday over allegations he helped a car-dealer friend who was seeking government funds.

world Updated: Jun 19, 2009 11:13 IST

Australia's Prime Minister Kevin Rudd faced calls to resign on Friday over allegations he helped a car-dealer friend who was seeking government funds.

Opposition leader Malcolm Turnbull accused Rudd of a "gigantic conflict of interest" and said he should step down if it was found that he had lied over the affair.

"If he's not telling the truth then he really needs to think about whether he can remain as prime minister," Turnbull said. "There's obviously a gigantic conflict of interest here, huge conflict of interest," he added.

The comments came as a senate inquiry opened into claims that Rudd and Treasurer Wayne Swan misled parliament over their possible role in car dealer John Grant's bid for emergency government funds.

Rudd and Swan have both denied making representations on behalf of Grant, a neighbour of the prime minister, who was seeking access to the two billion Australian dollar "OzCar" fund for struggling car dealers.

Grant once lent the prime minister a utility vehicle and reports also say both belonged to the shadowy "51 club" of high-flyers born in 1951.

Treasurer Swan meanwhile accused Turnbull of "bullying" a government staff member by threatening to produce evidence he had lied over the controversy.

"Obviously Wayne Swan is extremely rattled by the OzCar allegations and he is seeking to dishonestly create a distraction," Turnbull replied in a statement.

Senators were questioning Treasury staff over the affair, which poses Rudd with his biggest challenge since coming to office 18 months ago.

Brisbane's Courier-Mail newspaper said it had uncovered a "correspondence trail" of emails suggesting Rudd was keen to make sure the car dealer gained access to the OzCar fund.