The Federal Government has decided that the contract for the Australia Network international television service will remain with the ABC.

The Government scrapped the tender process last month, citing damaging leaks to the media.

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

Sky News was competing against the ABC for the contract.

Communications Minister Stephen Conroy said the Government had hoped the tender for the network would have been completed in good faith.

"However, several leaks have compromised the process and prevented a fair consideration of the bids," Senator Conroy said in a statement.

"The Government believes it is unfortunate that this process did not reach a satisfactory solution, however, in light of the circumstances it is now in the national interest to make a clear decision about the future of the service rather than allowing uncertainty to continue.

"Having reflected upon the process to date, and what the service really needs to provide, the Government has determined that Australia's international broadcasting service should be delivered by the national broadcaster."

And the ABC's managing director, Mark Scott, says he is delighted with the Government's decision to keep the television service with the national broadcaster.

He says the ABC will combine the resources of the television service with Radio Australia to expand the corporation's reach into the region.

"The ABC takes seriously the responsibility to take Australia into the Asia Pacific region, building on the outstanding services we have delivered over 70 years," Mr Scott said in a statement.

Sky says it expects to be "fully compensated" for applying for the now-failed tender.

Chief executive Angelo Frangopoulos says the decision to grant the contract to the ABC permanently is "extraordinary" given the two investigations.

Deputy Opposition leader Julie Bishop says Prime Minister Julia Gillard must explain the ongoing and unacceptable political interference in its handling of the tender.

"It is deeply troubling that the Government has made a rush decision to grant the contract to the ABC before the outcome of the AFP investigation is known," Ms Bishop said.

Senator Conroy faced a conflict of interest in the matter and there had been no adequate explanation of how that conflict would be avoided, Ms Bishop said.

The decision looked to have been made while Foreign Minister Kevin Rudd was out of the country and absent from Cabinet.

Opposition communications spokesman Malcolm Turnbull said the complete failure of the tender revealed the chronic infighting and incompetence of the Government in full light.

"Consumed by the worsening antagonism between the Prime Minister and her foreign minister, the Government has done a complete backflip and given the Australia Network contract in perpetuity to the ABC," Mr Turnbull said.

"At every stage, what should have been a straightforward, businesslike tender for an important national interest broadcasting task, has been poisoned by the deep personal and factional hatreds within this dysfunctional Labor government."

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 has been performing well in the role and the Government believes the national broadcaster will maintain and further enhance the Australia Network in the years ahead," Senator Conroy said.

"The Government also believes the ABC is well-placed to explore the opportunity to combine the Australia Network with its current international radio service, Radio Australia, and potentially with new online services to provide a multi-platform international media operation to embrace the converged media era."