By Ari Sharp
Federal Opposition Leader Malcolm Turnbull has denied threatening a prime ministerial staff member over the OzCar affair, saying he was only offering "helpful advice''.
Earlier today, federal Treasurer Wayne Swan accused Mr Turnbull of making the threatening approach to the adviser during Parliament's Mid-Winter Ball on Wednesday night.
According to a note made by Prime Minister Kevin Rudd's economics adviser Andrew Charlton about the exchange, Mr Turnbull told Dr Charlton not to lie "to protect your boss''.
Read a transcript of the alleged conversation between Malcolm Turnbull and Andrew Charlton
But the Opposition Leader has denied the conversation amounted to a threat.
"Obviously Wayne Swan is extremely rattled by the OzCar allegations and he is seeking to dishonestly create a distraction,'' he said in a statement.
"A conversation did take place between myself and Andrew Charlton at the Mid-Winter Ball.
"But even the inaccurate and incomplete file note from Mr Charlton demonstrates no threats whatsoever were made.
"It is a sad day for the Labor Party when reminding someone of the ninth commandment is seen as a threat, rather than helpful advice.''
At his press conference this morning, Mr Swan had said: "We all know there's good Malcolm and bad Malcolm, but I think the bad Malcolm turned up at the ... ball the other night''.
The Coalition has vowed to use a Senate inquiry this afternoon to pursue claims Mr Rudd and Mr Swan assisted a Queensland car dealer to access the $2 billion taxpayer-funded OzCar scheme.
The scheme aims to help cash-strapped dealers obtain finance to purchase cars.
Mr Turnbull's alleged threat related to claims about Kevin Rudd and the OzCar motor finance scheme.
Dr Charlton alleges Mr Turnbull's threat was over supposed knowledge of contact between the offices of Kevin Rudd and the Treasurer, Mr Grant, and treasury officials administering the OzCar scheme.
According to the file note, Mr Turnbull told Dr Charlton: "Integrity is the most important thing in a man's career. That is why I encourage you, no matter what the circumstances, no matter what the pressure, not to lie."
"Thank you for the advice," Dr Charlton apparently responded. "I don't feel any pressure to lie."
Mr Turnbull continued: "This whole OzCar issue will be very damaging for you. Let me just give you some friendly advice. You should not lie to protect your boss."
Dr Charlton: "I have not."
Mr Turnbull: "You know and I know there is documentary evidence that you have lied."
Later in the conversation, Mr Turnbull said: "I advise you to consider your actions very carefully."
At a hastily convened media conference in Canberra this morning, Mr Swan described Mr Turnbull's suggestion there had been email contact between the Prime Minister's office and Treasury officials on behalf of Mr Grant as "ridiculous claims".
"We can find no record of any relationship between the Prime Minister or his office and Mr Grant."
"When cases were brought to our notice, when representations were made on behalf of car dealers, they were referred through my office to the Treasury. End of story."
Mr Rudd and Mr Swan have in Parliament previously denied any improriety over the OzCar scheme, but a News Limited report today claimed there was a "correspondence trail" involving Mr Rudd's office and Treasury officials.