A bitter stoush has erupted over the potential sale of Victoria's share of Snowy Hydro, with Victoria telling the Turnbull government "they can forget it" if they want to dictate terms of the sale.

Victoria's 29 per cent stake in the scheme is estimated to be worth $2 billion.

Dam and water storage for the hydro scheme in the Snowy Mountains.

"This is not a situation where the purchaser of a house can tell the vendor how to spend the money and, if they think it is, they can forget it," state Treasurer Tim Pallas told Fairfax Media.

The federal budget revealed that Victoria's share of the infrastructure carve-up had dropped to just eight cents in the dollar, with Premier Daniel Andrews accusing Canberra of ratting on an agreement over major projects.