The Opposition has accused the Prime Minister and Treasurer of seeking favours for Mr Grant and then lying to Parliament about it.

In a parliamentary committee today Liberal MPs have been quizzing Mr McPhee on the nature of his investigation.

Mr McPhee says he is likely to call staff members of the Prime Minister and the Treasurer to give evidence but he is not sure yet whether he is able to call Mr Rudd and Mr Swan.

Meanwhile, the Federal Opposition is refusing to bow to government demands that it produce the disputed email at the centre of the scandal.

The Opposition says the email implicates Mr Rudd in the scandal but the Government says the document is a fake that may have been manufactured by the Opposition.

The Coalition denies it is behind the email, saying it is relying on media reports about it.

An email at the centre of the OzCar affair has reportedly been found inside the Treasury's computer system and appears to have been concocted inside the Treasury Department.

The email in question has been found in Treasury's system by police and was fraudulent, the ABC reported.

Federal police executed a search warrant at the house of Treasury official Godwin Grech and interviews Mr Grech about the email.

The three officers left Mr Grech's home in Calwell,  Canberra, at 1.15pm (AEST) .

"We cannot say anything,'' one of the officers told waiting reporters.

Mr Grech is believed to be still inside his home.

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Aaaah... Fraudulence... As anyone like me who could forge documents to perfection, we know the prefect forgery never exists in such circumstances... Computers have made fraud more prevalent, but fraud in writing has existed for thousands of years, See War of the Worlds. Unfortunately the bulk of the comment above disappeared like many comments when this site changed provider. Will try to find it again....

On this OzCar affair, the timing is critical:

"The prime minister said when Mr Turnbull raised the OzCar affair in parliament last week "both he and the deputy leader of the opposition leant across this chamber and began shaking their fingers at Dr Charlton who sits in the adviser's box.

"That was last Monday."

"Labor also says Mr Turnbull threatened Dr Charlton over the email's existence at the press gallery ball on Wednesday.

The alleged email wasn't revealed in the media until Friday."

Possibly some grubby journo warned the Liberals of the story before publication... But who created the email and why is the question...????

news in a paper bag...

The civil servant who claimed to have received the fake email, Godwin Grech, is currently under police investigation and there is speculation about his possible links to the Liberal party.

But Mr Turnbull has told Sky News the Government is leaking information from the police inquiry to attack the Opposition.

"Think of the Federal Police inquiry into the boat that exploded off the northern coast of Australia some time ago," he said.

"We still haven't had a result from that. And yet we seem, with this inquiry, to get hourly, if not half-hourly running accounts.

"And the reason for that no doubt is that the Federal Police are reporting to Government and the Government is playing politics with it."

Government frontbencher Tanya Plibersek has told Fairfax Radio the AFP has released a limited amount of information about the case and that is normal.

"They have made it clear, as they often do in investigations, that they have questioned a particular person, they haven't named him, they've said a man of this description has been questioned," he said.

"The idea that they are giving a moment-by-moment update is wrong."

Grech pressured?

As both sides of politics try to gain the upper hand, more questions are being asked about the man at the centre of the scandal, Mr Grech.

The ABC understands Mr Grech has been giving information to the Coalition for several years and the Federal Government has suggested the OzCar head may have been pressured to leak information to the Opposition.

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See toon at top and frolick in this composted garden...

From the SMH

The treatment of the public servant at the centre of the OzCar affair will be investigated by a parliamentary committee.

The Committee of Privileges and Members' Interests will see if any "adverse actions'' were taken against Godwin Grech, who gave evidence at an inquiry that sparked debate about the integrity of Prime Minister Kevin Rudd and Treasurer Wayne Swan.

The evidence he provided sparked an Australian Federal Police raid on his residence which resulted in the discovery on his computer of a fake email at the centre of the allegations.

The Treasury official is also being investigated about a series of leaks from Treasury in the past year.

Liberal senator Bill Heffernan, who called for the inquiry, said Mr Grech has been "threatened, and intimidated for his evidence''.

In a letter tabled in parliament Senator Heffernan said the police raid was a "contempt of the Senate''.

"I am of the view that any witnesses who appear before Senate committees are entitled to protection from intimidation and threats of any nature,'' Senator Heffernan said in the letter.

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From the master of intimidation and dirt files, this is a good love letter...