Federal Treasurer Joe Hockey is continuing to insist the East West Link should be built as the Andrews government ramps up negotiations to dump the multi-billion dollar contract.

Premier Daniel Andrews on Monday declared he would not be breaking his promise to scrap the contract, claiming he had been in discussions with Prime Minister Tony Abbott about redirecting $3 billion of Commonwealth money earmarked for the road into other projects.

"I've had very positive discussions with Mr Abbott, respectful, positive discussions about how we can work together," Mr Andrews said.

The comments came as state Treasurer Tim Pallas confirmed discussions to scrap the contract for the project were entering a critical phase.