The Napthine government is set to ramp up plans for a metro rail tunnel in a major public transport budget pitch potentially funded by proceeds from the sale of the Port of Melbourne.

In an interview ahead of next Tuesday's state budget, Treasurer Michael O'Brien has also revealed Victoria is in discussions with the Abbott government over a radical plan to help fund the second stage of the East West Link using cheap loans from the Commonwealth provided to private sector construction companies.

Victorian Treasurer Michael O'Brien. Credit:Jason South

Mr O'Brien warned Victoria had reached the limits of its ability to take on new debt, and had been in talks with the Commonwealth about funding major projects without jeopardising the state's coveted AAA credit rating.

''We are not interested in carrying any extra debt on our state books,'' Mr O'Brien told Fairfax Media. ''We are exploring whether there can there be a vehicle where Commonwealth loans could support a public-private partnership in such a way that it doesn't hit the state's book but reduces financing costs on a project.''