A member of the Myer family dynasty who played a key role in establishing the Great Barrier Reef Foundation (GBRF) has condemned a $444 million federal grant to the body as "shocking and almost mind-blowing".

The latest comments increase pressure on Prime Minister Malcolm Turnbull for making what critics branded a "captain's call" in allocating the funding.

Michael Myer was a financial supporter of the GBRF and a member of its board for two years until 2002, when he quit in part over concerns about its "corporate" direction and the growing involvement of figures from the fossil fuels industry.

Yesterday, it was revealed governance experts and lawyers from Environmental Justice Australia believed the grant contravened the Federal Government's own guidelines.

Michael Myer said the federal grant showed really poor judgment. ( ABC News )

Mr Myer told the ABC it was "unthinkable" for the Government to award the largest ever non-profit grant to an organisation with six staff members "without due diligence, without a proper tender process, without a request".

But the Federal Environment Department told the Senate the deal complies with all Government rules for grants and former deputy secretary of the Finance Department Stephen Bartos described it as "unusual but ....entirely legal".

"The notion of an organisation with six staff members suddenly having to manage $440 million, from a not-for-profit and philanthropic point of view is unheard of," Mr Myer said.

"It actually is quite shocking and almost mind-blowing. I think the Government's judgment is really poor."

Mr Myer said the Government was "greenwashing" by using GBRF "to be seen to be doing something for the reef" but via an organisation that would not be "unduly politicising it around climate change".

"If you read the fine print, they also say they don't want to rock the boat on the issue, they don't want to be politicising it, they don't want to be connecting the dots because it'll step on a lot of toes politically."

The federal funding agreement states that GBRF will "seek to address the highest priority threats to the reef", but does not mention climate change, only specifying "poor water quality and crown of thorns starfish outbreaks".

Risk management 'an afterthought'

Both GBRF and the Government have been at pains to defend the massive grant.

Mr Turnbull and Federal Environment Minister Josh Frydenberg told the GBRF chairman about the grant in April, 11 days after Cabinet's expenditure review committee voted to seek a "commercial partner" for a reef conservation plan.

Labor has called on GBRF to hand the money back, with Opposition Leader Bill Shorten declaring it "an ongoing scandal [and] a very good example of why we need a national integrity commission".

Mr Myer, who emerged from a three-year bankruptcy in 2015, has publicly supported the Greens and opposes the Adani mine.

He said his scathing views on the grant were informed by almost 40 years' involvement in the Myer Foundation, one of Australia's leading philanthropic organisations.

He said it was extraordinary that the grant agreement set aside $22 million for "scaling up activities" such as risk management plans to ensure proper governance, which should be done before money is handed over.

"In a normal tender process, if you were tendering for the grant, you would have done that work upfront," he said.

"You would have worked with your prudential authorities, you would have done your risk management, you would have shown how you were going to manage that money.

"But to be doing it as an afterthought, after the money has been given and it's in the bank account, again is quite extraordinary.

"I would suggest it's not a wise use of funds."

A spokesman for Environment Minister Josh Frydenberg declined to comment. ( ABC News: Nicholas Haggarty )

Mr Myer said he was involved with GBRF "pretty much at the get go", joining its board in 2000.

He said the original intent of the foundation was to help scientists collaborate with reef research funding from business and philanthropists.

"[But] I felt that it was going to become a more corporate type of board, whereas I really wanted to see a more activist type of board in terms of developing policies around the reef and having an influence on policy," he said.

"I don't think it had a deliberate intention to 'greenwash'."

But he said the GBRF board and its supporters came to feature "a lot of players" from fossil fuel-oriented industries, which raised "big questions" about climate change impacts on the reef.

"There is a cognitive dissonance … on the one hand saying the reef is really precious to us, it's an icon, we must protect it, but on the other hand actively pursuing policies that have the opposite effect," he said.

"For mine, that is happening in a big way here."

'We need to match global action with local projects'

The Great Barrier Reef Foundation is a small environmental charity with a board comprised of representatives of Australian business, science and philanthropy. It is supported by companies including BHP, Qantas, Rio Tinto, Google and Orica.

A spokeswoman for GBRF said Mr Myer had "not been involved with the foundation for 14 years so it's not surprising that he may not be familiar with our work and processes to protect the reef".

She said GBRF funded projects chosen by an expert science advisory committee — including from the Great Barrier Reef Marine Park Authority, the Australian Institute of Marine Science and CSIRO — and that corporate partners had no role in this.

Mr Myer described the large grant to GBRF for reef protection as "unthinkable". ( Supplied: Zack Rago )

"The foundation is clear that climate change is the biggest threat to the reef and we need to match global action on progress towards the Paris Agreement with local projects that can protect and restore the reef," she said.

The Great Barrier Reef Foundation's newly appointed chief scientist, UQ Professor Peter Mumby, said he hoped the political debate would not detract from efforts to protect the reef.

"It's very clear from the science that local management has a very big role to play … climate change is the other big part of that story," he said.

Professor Mumby said the foundation had "no fear of tackling the tough projects".

"In the five years I've been involved with them as a funded researcher I've seen them focus very heavily on solutions to climate change … so I'm very comfortable with the way things are moving. I just hope we can keep on course.

"From my point of view the Great Barrier Reef Foundation is in a good position to utilise these resources."

Professor Mumby said the foundation was "a very appropriate manager of these funds".

"They have the opportunity to leverage greater money into that pot … and they have a very open process to ensure that the right people get the funds to do what needs to be done," he said.

A spokesman for Mr Frydenberg declined to comment.

The Government has previously said the grant was awarded transparently because it had published its partnership agreement.

The agreement indicates GBRF has months of administrative work before it can channel funds into projects to improve reef health.

It states that when awarding contracts, GBRF will adhere to principles of "open, transparent and effective competition" — principles the Government's critics have said it ignored.

GBRF's partnership management committee includes marine scientist Ove Hoegh-Guldberg, former Queensland chief scientist Geoff Garrett and former University of Queensland vice-chancellor Paul Greenfield.