Australia's peak arts body was blindsided when the Federal Government ripped $105 million from its budget, new documents reveal.

Key points: Australia Council executive emailed Attorney-General's Department demanding answers day after budget

Australia Council executive emailed Attorney-General's Department demanding answers day after budget Labor says emails show was policy on-the-run and a "ministerial slush fund"

Labor says emails show was policy on-the-run and a "ministerial slush fund" New Minister Mitch Fifield says there has since been a "rebalancing" of funding

Former arts minister, Attorney-General George Brandis, used last year's budget to slash the Australia Council's funding over four years.

Senator Brandis diverted most of the cash to a new, so-called National Program for Excellence in the Arts (NPEA) — a fund the Minister could directly control.

Documents obtained by ABC News under Freedom of Information laws show the Australia Council — an independent government body — was not consulted about the size of the cut or told what programs it would affect.

A day after the May 12 budget, an Australia Council executive emailed the Attorney-General's Department demanding answers.

"How was the funding reduction of $27.7M in 2015-16 (and the similar amounts for the forward estimates) arrived at?" it read.

"What will be the main activities of the National Program for Excellence in the Arts?

"To enable us to plan for what the Australia Council will look like as an organisation going forward and what activities it will remain responsible for, we would be grateful for some further information on the budget measure re: National Program for Excellence in the Arts."

Changes 'caused tremendous disruption in the arts community'

Labor's arts spokesman Mark Dreyfus said the documents prove the new "ministerial slush fund" was policy on-the-run.

"It's no way to make policy and it was a policy announcement that these documents actually show didn't have a developed rationale at the time the budget announcement was made," Mr Dreyfus said.

"It's exactly the sort of thing you would want to consult with a body like the Australia Council about, to find out what the impact's going to be on their various programs, and of course the impact turned out to be disastrous.

"They've caused tremendous disruption in the arts community, that disruption is continuing, it hasn't been repaired.

"I'm still calling for the whole of the money that was removed from the Australia Council to be returned."

Hundreds of artists rallied against the changes, and another Australia Council email from May 13 shows the speed of the backlash.

"The reaction has been strong and we have a high volume of media enquiries," the email to an Arts Ministry assistant secretary said.

"There has also been an incredible level of communication from the sector expressing significant concerns."

Brandis refuses to comment on the emails

Prime Minister Malcolm Turnbull last September stripped the Attorney-General of responsibility for the arts, shifting it to Communications Minister Mitch Fifield and his department.

Senator Fifield last November gave back $32 million over four years to the Australia Council, changed the NPEA to the Catalyst fund, and stressed it would have a focus on smaller arts projects.

Senator Brandis's office directed the ABC's questions to the new minister.

"On coming into the portfolio I consulted stakeholders and considered feedback on the draft guidelines for the proposed National Program of Excellence (now Catalyst)," Senator Fifield said.

"The Government subsequently decided to repurpose $32 million over the forward estimates to the Australia Council.

"The rebalancing of funds is providing the Australia Council with greater capacity to meet the needs of small and medium organisations and is also in recognition of its role as the Commonwealth's vehicle for supporting individual artists."