The Australian newspaper has this morning defended its coverage of a police investigation into how details about a secret $60,000 scholarship awarded to the daughter of the Australian Prime Minister found its way into the public domain.

The story broke in May this year, amid revelations that Prime Minister Tony Abbott did not declare the benefit in his parliamentary interests register. The Prime Minister has maintained that the scholarship was awarded on merit, however documents and information published by New Matilda cast serious doubt on those claims.

On Saturday, the Weekend Australian published a front-page story alleging there had been a “plot” to target Frances Abbott, in a bid to bring down her father.

The story, which has been widely shared across social media, claimed that 500 students’ records at the Whitehouse Institute of Design were illegally accessed.

New Matilda revealed in an opinion piece in reply yesterday that the claim 500 records were accessed is false.

The story also falsely asserted that NM contributing editor Wendy Bacon defended the illegal accessing of 500 student records on the grounds of public interest.

The comments attributed to Ms Bacon in Saturday’s coverage were taken from tweets she sent in May about the original story – two months before the false allegations around 500 hacked records were first aired publicly.

The story also falsely claimed that Ms Bacon was “deeply” involved in the story – in fact Ms Bacon had an ‘additional reporting’ byline on the story.

In a piece published this morning, under the headline ‘New Matilda editor Chris Graham backs brave sources’, the nation’s only daily newspaper writes: “The Australian stands by its weekend report.”

The issue has been a hot topic on social media in the past 72 hours, with conservative tweeters outraged at the false claims New Matilda ‘hacked 500 students’ records’ in a bid to damage the Prime Minister.

Unfortunately for News Limited, publisher of The Australian, Daily Telegraph columnist Tim Blair weighed into the issue before the claims were revealed to be false, likening the ‘hacking of 500 students' records’ to the phone hacking scandal in Britain.

NM has refused to comment on The Australian’s claims about the identities of its sources. The matter is the subject of an ongoing police investigation.

The Australian’s coverage has led to renewed media interest in ‘Whitehousegate’. The Financial Review, The Daily Mail, The Sydney Morning Herald, The Guardian and Pedestrian TV have all taken the issue back up in recent days.

Late last week, Fairfax media reported that a former staff member at the college had launched legal action against Whitehouse.

The revelations around the secret scholarship came after the federal government handed down a budget that would greatly increase the costs of accessing a tertiary education. It also delivered a massive potential windfall to privately owned colleges like Whitehouse, quarantining around $800 million in public funding, which is now accessible to the private tertiary sector.

The reporting around the issue has revealed that the Chairman of Whitehouse, Les Taylor – after whom the scholarship for Frances is named – is a personal friend of the Abbott family, and a prominent Liberal Party supporter and donor.

Mr Taylor has told media he had no knowledge of the process for awarding the scholarship.

It also emerged that in addition to the secret $60,000 scholarship, Frances Abbott also won a job at Whitehouse’s Melbourne campus after she completed her studies. Internal Whitehouse documents obtained by New Matilda revealed Ms Abbott did not have a role assigned to her position.

Mr Abbott has steadfastly refused to update his parliamentary interests register, maintaining the scholarship was awarded on merit. This is despite his entries acknowledging numerous free gifts and travel provided to his wife and children, in most cases worth just a few hundred dollars.

Mr Abbott’s register also records several gifts from Whitehouse Chairman Les Taylor.