Rudd-era cabinet documents predicting huge private investor interest in the NBN show Labor was "in a fantasy land", the Federal Government said.

The files were among hundreds of classified papers left in two ex-government filing cabinets purchased at a furniture sale and obtained by the ABC.

One document from April 2009 predicted "many early approaches by a range of possible investors".

The negotiation plan flagged proposals being made even "before all the details of NBN Co are settled".

"The government does not need to rush into negotiations with investors making early offers," the file said.

Communications Minister Mitch Fifield said the documents confirmed decision-making was "rushed and flawed".

"Labor was in a fantasy land believing the private sector would pay for an NBN in 2009 that didn't exist, that had no plan, no staff, no money," Senator Fifield said.

"This uncovers Labor's mad scramble to deliver on an NBN that was planned on the back of a beer coaster."

RMIT associate professor Mark Gregory said the documents revealed Labor's "flawed" thinking about NBN funding.

"For them to fail to realise that they would not be able to successfully get private investment into the NBN highlights a very fundamental misunderstanding of the telecommunications market."

The document was created four days before the Rudd Government announced it was abandoning a tender process and spending $43 billion on the project.

Telstra investment focus

The document focuses on Telstra, and the terms on which the Government would accept the company's investment into the NBN.

The document said a newly created Telstra Wholesale business would be given the green light to take a larger stake in NBN Co.

"The ideal outcome, over time, is the structural separation of Telstra by action of the board."

But such a split never occurred.

"We now know, looking back, that Telstra had some significant wins in its negotiations with the government," Dr Gregory said.

"Even today the NBN is still beholden to Telstra for about $1 billion a year for leasing and rental costs for access to Telstra's infrastructure."

Telstra had done well during negotiations with various governments, several industry sources told the ABC.

Former communications minister Stephen Conroy was approached for comment.

NBN Co last night declined to comment.