Treasurer Tim Pallas has slammed an Auditor-General's report as "illogical and incoherent" in an extraordinary response to criticism of the $6.7 billion West Gate Tunnel project.

Auditor-General Andrew Greaves said the Treasury Department failed to rigorously assess the controversial project now being built in Melbourne's west by tolling giant Transurban.

An artist's impression of the West Gate Tunnel

In a scathing report released on Wednesday, the watchdog said the government approved the new tunnel without sufficient proof that Transurban's market-led proposal demonstrated value for money and "unique qualities".

Mr Pallas, who approved the Transurban toll road, rejected all of the Auditor-General's findings, describing the report as mere "subjective opinion".