The Coalition has ramped up its calls for Prime Minister Julia Gillard to resign following the release of a new document that showed she actively argued for the incorporation of the Australian Workers Union (AWU) Workplace Reform Association.
Citing a letter allegedly penned by Ms Gillard, Fairfax Media reported on Thursday that the future prime minister wrote the Corporate Affairs Commission in Western Australia to allay the body's concern that the AWU fund "might be a trade union and therefore ineligible," for incorporation.
Apart from having a direct hand in the mentioned letter, Ms Gillard, who was then working for law firm Slater & Gordon, "drafted the rules for the association ... without opening a formal file, without consulting the senior partners and without taking advice from expert lawyers within the firm," the Fairfax report said.
This new revelation belied earlier insistence by the Labor leader that her role in the AWU slush fund was limited, outrightly dismissing insinuations that she was a party in the fraud reportedly perpetrated by Bruce Wilson, her former boyfriend, and Ralph Blewitt, the latter's alleged bagman.
The two siphoned off some $400,000 from the AWU fund that was set up with the legal services contributed by Ms Gillard, who also benefitted financially from the corrupt activities of AWU officials, media reports said.
The prime minister, however, flatly denied any wrongdoing, asserting in two marathon news briefing that she was an innocent participant of what she believed then as a legal procedure that was later used as a guise to steal money.
But the emergence of the letter, the Coalition said, proved that Ms Gillard played more roles in the affair than what she was willing to accept.
In effect, the reputation of Ms Gillard has been sullied by the document and her "fitness for office," is now in question, Opposition Leader Tony Abbott told Sky News on Thursday morning.
"This is obviously a very serious matter for a lawyer, for a law partner, to make false representations that would appear to be in breach of the law ... It demonstrates Prime Minister made false representations," Mr Abbott said.
He hinted too that Ms Gillard's position as prime minister has become untenable due to serious questions about her "character and integrity."
For senior Liberal figure Christopher Pyne, the prime minister must stand down or resign today if she "had any respect for the parliament and the Australian public or the Labor caucus."
"I'm not Hercule Poirot, but I can work out what's going on here," the Australian Associated Press (AAP) reported Mr Pyne as saying, adding that the letter destroyed previous arguments aired by the prime minister.
Defending Ms Gillard, cabinet member Bill Shorten is far from convinced that there was no smoking gun at all from the new allegations except from the "so much smoke and fiddle and faddle from the opposition."
All the letter had proved was the prime minister simply fulfilled her job as a lawyer, Mr Shorten stressed.
"As far as I can tell any piece of correspondence is part of the process of setting up the fund ... and that's it," the senior Labor minister was reported by Sky News as saying.
His assertion was echoed by Parliamentary secretary Mark Dreyfus, telling reporters today that "there's no smoking gun ... there's not even a water pistol."
"There is nothing in this smear campaign. The prime minister has not contradicted herself at any time in the last 17 years." Mr Dreyfus said.
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