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The Australia Network tender process has been terminated and the police called in amid claims the leaking of confidential information has compromised any deal.
Communications Minister Stephen Conroy said on Monday ending the process was in the best interests of broadcasters ABC and Sky News, who were competing to win the new contract for the international television service.
'The advice which the government has received is that due to significant leaks of confidential information to the media, the Australia Network tender process has been compromised to such a degree that a fair and equitable outcome may no longer be able to be achieved,' Senator Conroy said in a statement.
'The government is extremely disappointed that such leaks have occurred and that the process has been compromised.'
He said the Australian Federal Police (AFP) have been asked to investigate the leaks.
Stories about details of the tender process have run in newspapers during the past six months.
The ABC currently operates the Australia Network and Senator Conroy said its contract would be extended by six months until August 2012 while the government resolves the long-term contractual arrangements.
This will also allow the ABC to book satellite time and maintain an ongoing service.
'The government will now make a decision on the long-term arrangements for the operation of the Australia Network no later than the end of March next year,' Senator Conroy said.
He said that at all times, the government has acted within the terms and conditions of the tender process.
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