Alastair Furnival - also had links to alcohol industry. Former Liberal MP Mal Washer said he had contacted Senator Nash's office on a number of occasions, but had only been able to speak with Mr Furnival. "Normally when you contact them they will have a yarn with an ex-federal colleague," Dr Washer said. "There was no reason given [by Mr Furnival] for the cut except for 'we don't have enough money and have a nice day', but, well, it's amazing what they can find money for." He said neither Mr Furnival or Senator Nash appeared to have much knowledge about the council, including its huge library of more than 100,000 drug and alcohol resources that will now have to close.

Former Liberal MP Mal Washer: “There was no reason given [by Mr Furnival] for the cut except for ‘we don’t have enough money and have a nice day’, but, well, it’s amazing what they can find money for.” Credit:Chris Lane Mr Furnival resigned as Senator Nash's chief of staff on Friday citing a "smear campaign" against him after Fairfax revealed that he and Senator Nash had intervened to have a new healthy food website taken down, and that he had been involved in high-level food policy negotiations with the states and territories without disclosing that he co-owns with his wife a lobbying company that works for the soft drink and confectionary industry. At these meetings both declared no conflict of interest. Senator Nash made a late-night statement to the Senate on Tuesday to admit that Mr Furnival had "a shareholding" in Australian Public Affairs, after earlier stating he had no connection with it. Documents lodged with the corporate regulator show Australian Public Affairs is wholly owned by another company, Strategic Issues Management, of which Mr Furnival and his wife Tracey Cain are the sole shareholders, and Mr Furnival was the director. In 2004, Strategic Issues Management was described as specialising in co-operatives in the agriculture, transport and liquor sectors. Australian Public Affairs appears to have been involved in alcohol-industry PR at least as recently as 2012.

Public Health Association of Australia head Michael Moore said given everything that had happened the government needed to clear the air. "That means, one, simply acting to reinstate the funding for ADCA and, two, reinstating the health star rating website," he said. The council's chief executive, David Templeman, agreed the decision should be overturned. "I'm just literally gob-smacked by the vetting process that has gone on in the Prime Minister's office," he said. "I'm just wondering now was that ever divulged, was it ever declared? I don't know but I doubt it." He said the government had changed its story on why the funding was cut, first saying that it needed the savings and then wrongly stating that the council had been in financial difficulties.

"I know that the industry has not been happy with our advocacy, they expressed that to the chair of the ADCA board last year," he said. Council patron Ian Webster, Emeritus Professor of Public Health and Community Medicine at the University of NSW, said in the past it had successfully worked with numerous state and territory governments, including John Howard's government. It also helped develop the Hawke government's National Drug Strategy. He said it was "absolutely strange" to suddenly have its funding removed. "This is the first government that has taken this position," he said. "ADCA has been an organisation that has existed for almost 50 years." He said it had taken a number of positions on alcohol - including supporting taxation based on alcohol volume, rather than product, and limits on advertising and availability - that are opposed by many in the alcohol industry.

"I do know that there are some powerful interests involved... we now have an alcohol-industrial complex at every different level promoting an economy where each on its own is reasonable, but together does a great deal of harm to the community," he said. Labor health spokeswoman Catherine King said every additional inquiry into the situation appears to reveal more information of concern. "Senator Nash needs to make a full account of these matters. In particular why she chose to abolish ADCA and is opposing the health star rating system in light of these conflict of interest revelations," she said. "The Prime Minister's office having approved this appointment needs to detail what their knowledge of the policy rationale for these decisions was." Australian Medical Association head Steve Hambleton said the funding cut should be reviewed.

"When we see adverse effects and acute side-effects from a toxic product continuing to rise we have to really question the wisdom of defunding a body that is trying to reverse that," he said. "We would be happy to support a review of the decision." Loading A spokeswoman for Senator Fiona Nash said there had been no discussions at this stage about whether the funding cut would be reviewed. Follow us on Twitter