The ABC has evidence the Federal Government gave $36 million in funding to a controversial shale oil project, disregarding departmental advice.




Southern Pacific Petroleum requested the funding to prop up its failing shale oil mine near Gladstone in Central Queensland after Greenpeace protests had resulted in the loss of two major oil company clients.




A leaked document shows that despite key departments recommending the funding request be rejected the handout still received cabinet approval.




Shadow Environment Minister Kelvin Thomson says the document reveals departments gave a wide range of reasons for rejecting the funding.




"It turns out that every department which was asked about recommending against it whether it be on environmental grounds, cost, industry equity and world trade organisation considerations and the like," Mr Thomson said.