A proposed road tunnel through Melbourne's west appears to be in line for federal funding after Prime Minister Tony Abbott indicated he supported the idea "if it stacks up".

Project facts Five-kilometre tolled tunnel, running below Yarraville

Five-kilometre tolled tunnel, running below Yarraville Cars tolled $3, trucks tolled $13

Cars tolled $3, trucks tolled $13 No properties or public land acquired

No properties or public land acquired Includes additional lanes on existing West Gate Freeway between the M80 Ring Rd and Williamstown Rd

Includes additional lanes on existing West Gate Freeway between the M80 Ring Rd and Williamstown Rd Planned truck route upgrades on West Gate Bridge to be part of new project

Planned truck route upgrades on West Gate Bridge to be part of new project Expected to halve travel time to the city from the M80 Ring Rd during the morning peak

Expected to halve travel time to the city from the M80 Ring Rd during the morning peak Work could begin late 2015 to be completed by 2020

Toll road company Transurban has proposed to build a five-kilometre tolled tunnel under Yarraville, linking the West Gate Freeway to CityLink, to ease pressure on the West Gate Bridge.

The Western Distributor proposal would require significant money from the Commonwealth, but no money from the Victorian Government.

The Federal Government has already allocated $1.5 billion for the western section of the now abandoned East West Link project.

Mr Abbott told Macquarie Radio he had not seen a detailed proposal for the new tunnel but was willing to consider funding it with money meant for East West Link.

"If that's how it turns out then fine," he said.

"But what the Victorian Government can't do is keep the money and not build anything."

Mr Abbott said the proposal being considered by the Victorian Government was similar to the western section of the East West Link.

"We're certainly prepared to support that project if it stacks up," he said.

"The tragedy for Victoria is that the only [project] that was shovel-ready was East West Link and East West Link was cancelled by this Government."

'Fantastic news' for Victoria: Premier

Victorian Premier Daniel Andrews said he was "delighted" by the Prime Minister's comments, after doubts were raised about the Commonwealth's involvement in the Western Distributor project.

"This is fantastic news for our state," Mr Andrews said.

"It's the Prime Minister delivering on the commitment he made to me to sit down and work together to make sure we do something meaningful about congestion on the West Gate Bridge.

"I reckon this is a fantastic outcome."

The proposal would see Transurban pay for two thirds of the project and the Commonwealth pay for the remaining third, meaning the Victorian Government would not be required to contribute.

Mr Abbott said he believed Victoria should contribute to the project as well, but Mr Andrews would not say whether Victoria was prepared to do so.

"We're going to get the best deal for Victorian taxpayers and I don't want to compromise that via the nightly news, giving Transurban a sense of what our bottom line might be," he said.

"When we secure a deal with Transurban I'll be happy to answer all those questions."

The State Government dismissed earlier reports that Mr Abbott could ask for the $1.5 billion allocated for East West Link to be returned.