There is growing support for a Senate inquiry into the Government's handling of a $100 million pre-election sports grants program cash splash, with One Nation leader Pauline Hanson backing the push from Labor and the Greens.

Key points: The Greens and Labor want the Senate to investigate the sports grants program

The Greens and Labor want the Senate to investigate the sports grants program An audit accused the Government of bias in how some grants were awarded

An audit accused the Government of bias in how some grants were awarded Pauline Hanson says the grants were used as a "slush fund" to win the federal election

Those parties want the Parliament to investigate Cabinet minister Bridget McKenzie and the Federal Government following a scathing audit of a sports grants program, which accused the Coalition of bias in its distribution of funds.

An Auditor-General's report found hundreds of applicants recommended by government agency Sport Australia were rejected by then-sports minister Senator McKenzie in favour of clubs in electorates the Coalition wanted to win in last year's federal election.

"The audit has proven that they have used pork barrelling as a slush fund," Senator Hanson told the ABC.

Senator McKenzie has dismissed calls from political opponents and clubs that missed out on funding for her to stand down.

She insists she followed the rules and all clubs that received funding were eligible for the money.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 36 seconds 36 s Bridget McKenzie dismisses calls for her to resign following a scathing audit of sports grants.

Senator Hanson has been in a long-running dispute with Senator McKenzie over the minister's handling of the dairy industry, having become the Agriculture Minister after May's federal election win.

"If it's going to prove that they've used that money, taxpayers' dollars, to feather their own nest and further themselves [then] yes I do [support the inquiry]," the One Nation leader said.

Federal Opposition Leader Anthony Albanese said Senator McKenzie's position on the frontbench was untenable.

"This is outrageous behaviour by a Government that really believes that it has a right to do whatever it likes, whenever it likes, wherever it likes," he said.

"The truth is that her position is untenable as a minister."

The Parliament is currently on its summer break, with politicians returning to Canberra for the first sitting of the year in February.

That will be the first opportunity for the Opposition and crossbench to seek to set up the inquiry into the Government's management of the sports grants.

"Australians expect transparency and accountability from those in power," Greens senator Janet Rice said on Thursday.

"Senator McKenzie's decision-making process was completely unsporting, with clubs in safe seats hampered in their chances of winning a grant.

"We will pursue this in Senate Estimates and will consider seeking the support of the Senate for an inquiry."