Tony Abbott hardened his resolve against giving Qantas a debt guarantee after a meeting with his business advisory council last week headed by Maurice Newman.
Senior Liberals believe the meeting with Mr Newman was critical in prompting the Prime Minister to dump any thought of extending Qantas a credit facility, seemingly putting him at odds with Treasurer Joe Hockey.
_The West Australian _understands that Mr Newman told the PM last Wednesday that if Qantas were given Government assistance, other airlines should be too.
Mr Abbott expressed that same sentiment the next day in Parliament when he said: "The difficulty is this: what we do for one business, in fairness, we have to make available to all businesses."
Cabinet decided on Monday to formally deny Qantas a debt guarantee and instead pursue abolition of foreign ownership restrictions governing the national carrier.
Revelations about Mr Newman's influence on the PM's thinking came as Labor pointed to previous comments by Mr Hockey and Transport Minister Warren Truss contradicting the Government's position.
Mr Hockey, who had built a case for Qantas getting help, said yesterday he no longer held the view that dilution of Australian control of Qantas would impact on the company's social responsibility.
The Prime Minister effectively expressed no confidence in Qantas management yesterday. "Now, under good management, there is no reason why Qantas cannot be very profitable," he said.
Opposition Leader Bill Shorten said even changing the law would not save Qantas, saying it would take a year for the airline to be split into domestic and international companies, while the Foreign Investment Review Board could take up to two years to consider an overseas bid.
'Under good management, there is no reason why Qantas cannot be very profitable.'" Prime Minister Tony Abbott