The Federal Government is believed to have scrapped the replacement scheme for its botched home insulation program.

The original $2.4 billion program was shut down in February after it was linked to four deaths, more than 100 house fires, and cases of rorting.

Prime Minister Kevin Rudd commissioned respected former bureaucrat Allan Hawke to review the scheme and recommend changes for a revamped program, which Mr Rudd promised would start on June 1.

Fairfax papers claim Dr Hawke's report is highly critical about the policy's development and implementation and that timelines for starting the revised program in June were insufficient.

It is believed that Cabinet ditched the replacement scheme yesterday to focus instead on fixing the 50,000 homes that have had foil insulation installed, and carrying out safety inspections for another 150,000 homes.

Assistant Climate Change Minister Greg Combet will not comment on the future of the replacement scheme and Mr Rudd is also keeping quiet about Cabinet's deliberations.

"In terms of the report itself and where it's up to, and the deliberations on it and its debate in the public domain, I'll wait for Minister Combet's statement on the above," he told ABC local radio.

"Minister Combet has been re-evaluating all of these matters to make sure that these things are done properly and in the safest way possible. I have absolute confidence that he's doing a first-class job."

Finance Minister Lindsay Tanner also declined to comment when questioned on Radio National this morning.

"I'm afraid that I can't comment on Cabinet deliberations but we are focused very intently on dealing with the problems that have emerged with the home insulation program," he said.

"[We are] dealing with the checking of people who are at risk and making sure that we fix those problems; that's our key priority in this area and that's what we're going to continue to focus on."

Opposition Leader Tony Abbott says it is another example of the Government failing to keep its word.

"First of all the Government said there was going to be this program available, then when they suspended it they said that it would restart, now they've said that it's not going to restart," he told Fairfax radio.

"So you've had three different stories from this Government and everyone who's relied on this Government at the earlier stages has been badly let down."

Mr Abbott says the Government must compensate insulation companies.

"There's also all the businesses that invested large amounts of money on the strength of what they thought was a commitment from the Government," he said.

"The Government owes something to them as well and they've got to be appropriately looked after."

Opposition environment spokesman Greg Hunt says the Government has been considering scrapping the new scheme for a while.

"The Government's been split for some time. Greg Combet has wanted to drop the program," he said.

"The Prime Minister, for reasons of pride, has wanted to keep the pink batts program going.

"We know that it's been a disaster; we think that Combet has stared the Prime Minister down with the evidence that this program is simply unsalvageable.

"Right now, we want a commitment that every one of the million homes will be inspected, so as we can find and fix 240,000 dangerous and dodgy roofs."

Mr Hunt says the Government should release Dr Hawke's report and there should be a judicial inquiry because the auditor-general's inquiry is not enough.

"The auditor-general's inquiry has excluded, at the Government's request, an inspection into how the four deaths were linked or otherwise not linked to the program," he said.

"But it's absolutely clear there has been a pattern [of problems], which was warned about as far ago as February 18th last year.

"And it beggars belief that the auditor-general's inquiry has ruled out the discussion of the causes and consequences of the program in contributing to these tragedies."