Leaks from the media have forced the Federal Government to kill off the tender process for the $223 million Australia Network contract.

Federal police have been called in to find the source of the leaks, which detailed confidential bids to run the Government's international television service.

The ABC currently hosts the service, which is designed to showcase Australia's democratic values to TV viewers in the Asia Pacific, but it was competing with Sky News to retain it.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 4 minutes 9 seconds 4 m 9 s Sabra Lane discusses the termination Download 1.9 MB

After it was delayed for six months, Communication Minister Stephen Conroy announced the decision to scrap the Australia Network tender process yesterday.

"Due to significant leaks of confidential information to the media, the Australia Network tender process has been compromised to such a degree that a fair and equitable outcome may no longer be able to be achieved," he said in a statement.

The leaks suggested a panel with Foreign Minister Kevin Rudd's backing had recommended taking the contract from the ABC and giving it to Rupert Murdoch's Sky News.

The ABC will keep operating the service until August next year while the Government resolves the issue.

Sky News offered no comment when contacted.

But ABC managing director Mark Scott has welcomed the decision to extend the ABC's contract.

"The corporation appreciates the opportunity to discuss with the Government the future role international broadcasting can play across the region," he said.

The decision comes amid a background of animosity between News Limited, which published some of the leaks, and the Government.

"It will be interesting under Freedom of Information to find out exactly what has transpired, in particular whether the leaks reportedly awarding the contract to Sky are correct or not," News Limited spokesman Greg Baxter told the ABC.

News Limited also accuses the Government of political tampering in the tender process, but the Government says it deliberately gave Mr Conroy the final word on the tender because it was too important a decision to be left to the normal bureaucratic process.

The Coalition says the bungling of the broadcasting tender is another example of the Government being paralysed by its own incompetence.

"This is just another chapter of incompetence in a long and sorry tale of bungling," Opposition communication spokesman Malcolm Turnbull said.

"What there needs to be and what we are calling for tonight is a full investigation by the auditor-general. This whole sorry process is too important to be just pushed aside while Labor goes off to start again."

Australia Network, the country's international television broadcasting service, has been running since 1993.

It broadcasts news, drama and sport to 44 countries in Asia and the Pacific, as well as programs to teach English language skills.

The ABC's five-year contract was due to expire in August but in June the Government extended the national broadcaster's contract for six months because it needed longer to decide.

The new contract period was extended to 10 years to provide "greater certainty to the service provider".

Sky News is part-owned by the Seven and Nine networks and the British broadcaster BSkyB, which is 39 per cent owned by Rupert Murdoch's News Corporation.