ANTI-CLUSTER bomb campaigners have reacted furiously to revelations that the federal government secretly worked with the US to weaken a key international treaty to ban the notorious weapons.

The reaction came as the Future Fund confirmed that this year it dumped its investments in 10 munitions companies ahead of the ratification of the 2008 Convention on Cluster Munitions.

Leaked US diplomatic cables show Kevin Rudd's government was privately prepared to pull out of international negotiations for a global ban of the weapons if this threatened ties with US forces.

As The Age reported earlier this year, an article was inserted in the treaty as a result of the US-influenced lobbying. Legislation to enact the treaty domestically now contains loopholes that could allow Australian troops to participate in attacks using the bombs, and allow the US to store them on Australian soil. The legislation is expected to be passed by Parliament soon.

"It gets worse. Not only did the Australian government despicably and secretively act to water down the convention during the negotiation process - but now our own legislation to ratify that convention contains serious loopholes which further weaken Australia's commitment,'' Cluster Munitions Coalition founder John Rodstead said.