One of the budget's most contentious measures, the fuel excise, was born out of a double-dealing power play.

At the very top of the Government there was ferocious arguing, furious lobbying and extraordinary political manoeuvring, as senior Liberals tried to manipulate their Nationals colleagues.

This is the inside story.

Months out from budget day, senior ministers were searching for savings and contemplating something politically toxic.

They wanted to resume indexing the fuel excise to ensure petrol prices rise in line with inflation.

Treasury calculated the measure would reap $2.2 billion over the forward estimates and, most importantly, it would keep raising more and more money every year.

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The hard-heads liked the idea but knew they had a problem. How would they get the Coalition's junior partner on board?

A cunning plan is born

Promising to pour money into roads would help, but higher petrol prices are still toxic in the bush, where people drive long distances. So they hatched a cunning plan.

At budget time, Treasury routinely suggests putting the diesel fuel rebate on the sacrificial chopping block.

Worth around $5.5 billion a year, critics call the rebate a hand out, but farmers and miners, who use diesel to run machinery and vehicles vital to their operations, consider it a Holy Grail.

They get a rebate because they use their trucks off road and because the diesel is a business input.

It is considered unfair and inefficient to slug inputs rather than outputs.

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Some ministers liked the look of the potential savings but others considered it crazy and said so. Cabinet was split.

Julie Bishop, a West Australian, argued strenuously against touching the rebate.

Trade Minister Andrew Robb was equally vocal, telling colleagues the proposed change was "anti-investment" and would undermine Tony Abbott's mantra that Australia is "open for business".

The Nationals were apoplectic, with one saying "this is a fight we have to win". Barnaby Joyce, the Agriculture Minister, is said to have been "non-negotiable" over the issue.

Outside Parliament, powerful lobby groups were loading their muskets and sharpening their bayonets.

The farmers talked about tractors on the lawns of Parliament House. The miners warned of World War IV - World War III having been its devastatingly successful campaign against Kevin Rudd's super-profits tax.

'Play the Nats'

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But it was all a game. Senior Liberals have told the ABC they were never serious about cutting the diesel fuel rebate.

They are boasting it was a tactic to "play the Nats"; the rebate was put on the agenda and deliberately leaked to inflame the Nationals so the party would support the higher fuel excise as the lesser of two evils.

"[Changing the rebate] was never the plan," one senior source declared. "Gina and Twiggy would've come after us" – a reference to two of Australia's richest miners, Gina Rinehart and Andrew Forrest.

Different ministers have different perspectives on who used whom and how.

Finance Minister Mathias Cormann denies a backroom plan to trick the Nationals, tweeting: "Simkins story on decision to re-introduce fuel excise indexation inaccurate. No one actually involved in process could possibly say that."

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Sources intimate with the discussions of Cabinet's razor gang maintain there was no "cunning plan" to manipulate the Nationals.

They insist the cuts to the diesel fuel rebate were on the agenda. One source indicated that a cut of 2 to 3 cents a litre was contemplated but defeated after vigorous lobbying.

Nationals sources have also maintained the threat to the diesel fuel rebate was real.

Nationals Senator John Williams says it does not matter what the process was, but rather what the outcome was.

"Nationals would never be played by the Liberals. Political games don't get played around here," he said.

"There's some talk about that but I think the results were good, what came out in the budget.

"The diesel fuel rebate is essential for the farmers, for the fishermen and for the mining industry and also the retention of the rebates for the transport industry are most important and that's the main game.

"That's the main concern I have and many of my colleagues have and that was a very good decision."

Ms Bishop has talked up the strength of the Coalition, saying she is not aware of the report.

"We're a very close Coalition, we've been in Coalition for decades and we'll remain so ... this is a Coalition that will endure. It's not like the Labor/Greens that fractures at the pressure or first sign of the Australian public tiring of it," she said.

But that leaves the Coalition with a thorny question: Why are other senior sources saying they successfully "gamed the Nats"?

The Cabinet and its processes are notoriously difficult to penetrate, but the very fact senior Liberals are willing to say the sort of things they're saying – effectively rubbing the Nationals' noses in diesel – will only add fuel to this fire.