Victoria's financial watchdog is preparing to investigate the East West Link amid growing public concern about the way the costly project has been handled by the former and current governments.

The Sunday Age has learnt that Auditor-General John Doyle's office has been gathering information on the proposal for months, hoping not only to probe how the Napthine Government ended up approving the road, but also to give taxpayers a better understanding of the Andrews Government's decision to abandon the plan.

While an audit is unlikely until Labor has negotiated a way out of the contract with the consortium, such an investigation has the potential to prove sensitive for both major parties, given the amount of money involved in tendering, planning and ultimately walking away from the deal.

"Currently, the Auditor-General is maintaining a 'watching brief' on East-West and VAGO (Victorian Auditor General's Office) has been gathering information on the project for months," said Acting Auditor-General Peter Frost.

"Obviously, the office is interested in the outcome of the government's negotiations with the consortium and any audit VAGO undertakes will be with a view to examining what lessons there are to be learned to improve public administration and to shine a light on the factors that led the former government to proceed with the project."