THE Queensland Government has called on its federal counterparts to stop dragging the chain in relation to the proposed Toowoomba Range bypass.

In a leaked email obtained by APN Newsdesk, the State Government has upped the ante confirming it would commit $342 million towards the project.

The additional funding represents the State Government's full 20% commitment towards the $1.709 billion project.

The funding announcement is the largest commitment a Queensland Government, irrespective of political persuasion, has made towards the project.

In the email sent last week from Queensland Treasurer Tim Nicholls to Deputy Prime Minister Warren Truss as well as Premier Campbell Newman, Deputy Premier Jeff Seeney, Transport Minister Scott Emerson, Prime Minister Tony Abbott, Treasurer Joe Hockey and Industry Minister Ian Macfarlane, the State Government requested a firm commitment in writing of the Federal Government's 80% contribution.

Mr Nicholls said in the email the project was "ready to proceed should a definitive funding arrangement for the project be reached."

Furthermore, Mr Nicholls said in the email the Federal Government's contribution would need to be $1.367 billion.

Funding towards the full cost of the Toowoomba Range bypass needs to be delivered.
Funding towards the full cost of the Toowoomba Range bypass needs to be delivered. Dave Noonan

"Government will have to fund the full construction costs either directly through construction or through a deferred payment arrangement such as an availability fee," he said.

"This project does not make a return that would support private investment otherwise."

Mr Nicholls also sought assurances that if the project went ahead Federal Government funding to other projects would be maintained.

However, a government source told APN Newsdesk the project was being held up because the Federal Government has refused to commit any more than the $700 million it announced before the 2008 federal election, and both elections since, despite repeated claims to the contrary.

Another major stumbling block has been the Federal Government taking the "unprecedented" step and demanding the State Government release the project's "expression of interest" document so it could work out how to best deal with the $667 million shortfall in funding.

Federal Member for Groom Ian Macfarlane came under intense scrutiny on the eve of the federal election after it was revealed in the Coalition government's forward estimates it had reneged on its commitment and would only outlay $130 million towards the project in its first term of office.

As a result, Mr Macfarlane suffered one of the largest swings in the country when votes were counted the following day.

Furthermore, it is understood Mr Macfarlane and Mr Hockey have had heated exchanges over project's funding ahead of next week's mid-year economic and fiscal outlook announcement.

It is believed Mr Macfarlane pleaded with Mr Hockey bring forward any government funding in relation to the project or "he will be dead in the water."

The stalemate flies in the face of comments made by Mr Macfarlane at a business breakfast in Toowoomba on November 29 where he hinted an announcement in relation to the tender process was imminent.

In a statement to APN Newsdesk, in light of the leaked email, a spokeswoman for Mr Nicholls said the State Government was fully supportive of the project and would like to see it become a reality.

"The Newman Government has committed to funding our 20% share as per the business case released in November 2012," she said.

"As this road is part of the national highway system it requires 80% funding from the Federal Government.

"Without that commitment the project can not proceed. A procurement process will begin when funding has been agreed.

"Discussions with the Federal Government are ongoing and we are hopeful of a resolution in 2014."

Spokeswomen for Mr Hockey and Mr Macfarlane said neither would not comment on budget spending or deliberations as well as speculate on any figures ahead of Mr Hockey releasing them.

However, Mr Macfarlane confirmed in a statement he had held discussions in recent weeks in relation to the project.