Last night Thiess confirmed that project director Greg Miller and human resources manager Marcus Carroll would be stood down while company and external lawyers investigated the claims. It was hoped the results of the investigation would be known by early next week. Australian Workers Union state secretary Cesar Melhem said no worker should have their privacy invaded in such a way. He called for a major shake-up at Thiess and said the executives, if found guilty, should be sacked for their ''appalling'' behaviour. The situation at the site was unpredictable last night. Managers were to address workers at mass meetings from 7am today, and further meetings were to be held with union delegates and leaders later in the morning. The prospect of work halting on the site would not be welcomed by the Brumby government days from the election. Mr Melhem said the reaction of workers would determine if work was able to resume. ''Depending on the explanation, it will either calm people down and they resume working or we might need to have a time out and come back on Monday.''

Electrical Trades Union state secretary Dean Mighell labelled the spying ''unacceptable'' and said workers could stay off the job until their concerns were addressed. ''We will not resume work at the desalination plant until we have seen all files and information gathered on our members, their wives and children and that information is either returned to our members or destroyed,'' he said. Thiess Australian operations chief executive Nev Power, who denied he was aware of Mr Townsend being hired, said Australian Security Investigations was appointed to review security, recruitment and sub-contracting at the site. Mr Power said the investigation was yet to find evidence of privacy breaches. It is believed there have been concerns about rorting and nepotism on the project, with unskilled and unqualified workers getting jobs because they were friends or relatives of Thiess managers. People involved with the project have expressed alarm to The Age at the number of unskilled workers and warned of safety problems. Premier John Brumby said that if the spying claims were true he would be ''deeply, deeply concerned''. Opposition Leader Ted Baillieu said he would make the contract between the government and the private consortium public if he won power.

Victorian Trades Hall Council secretary Brian Boyd said an important issue was whether police or the government knew about the spying or had any role in providing information to Australian Security Investigations. Both have denied any knowledge. Police, in a controversial deal, previously agreed to provide files on protesters to the consortium. Australian Building and Construction Commissioner Leigh Johns said the claims of covert monitoring were being investigated. But he urged unions to not take unlawful industrial action over the claims. The Construction, Forestry, Mining and Energy Union will from today hold meetings at Thiess sites around Australia to discuss the spying. Mr Townsend was keeping a low profile in Hobart yesterday. A woman operating a reception desk at the office he shares in an industrial park in Glenorchy said he was unavailable for comment.

With ANDREW DARBY