Tony Abbott is grilled by 7.30 host Leigh Sales over comments about the BHP Olympic Dam mine project

OPPOSITION Leader Tony Abbott has denied saying he did not read a BHP statement on company's decision on the Olympic Dam mine before blaming the Government's carbon tax for the delay.

Mr Abbott has said the government's mining and carbon taxes are partly to blame for the company's decision.

BHP had been warning the two taxes were making Australia a less competitive place to invest, he said.

BHP Billiton chief Marius Kloppers said the company was not going ahead with the massive open cut pit because of current market conditions including subdued commodity prices and higher capital costs.

Assistant Treasurer David Bradbury said Mr Abbott had been "caught out lying".

He said the opposition leader admitted he had not read the BHP statement about the project's cancellation before calling a press conference to blame the decision on the carbon and mining taxes.

"Even a very peripheral reading of the material ... would suggest that these were factors that were not in play in the decision," Mr Bradbury said.

He also accused Mr Abbott of suggesting BHP had misled investors and the market "by not providing a full and frank disclosure of the reasons surrounding their decision".

"What we have here is a leader of the opposition who will allow no fact, no law, no personal company's reputation to ever get in the way of his reckless and irresponsible scare campaign," Mr Bradbury said.

But this morning Mr Abbott denied not reading the BHP statement, saying he read it at 3.45pm (AEST) yesterday.

When quizzed about the apparent contradiction between this and what he'd said on ABC TV's 7.30 program, the opposition leader said he was responding to a different question from compere Leigh Sales.

Finance Minister Penny Wong said Mr Abbott was asking Australians to believe what he said was true even though BHP had cited other reasons for its decision.

"This is one of the most dishonest, self-interested fear campaigns that we have seen in Australian politics," Senator Wong told ABC TV.

Nationals Senate leader Barnaby Joyce says it's "ridiculous" to suggest the carbon and mining taxes played no part in the decision to scrap the project.

"The question today is how could you possibly argue that a new tax that will be paid by the company is not an issue in the decision they make?" Senator Joyce said.

"Do we think for one second that this (carbon and mining taxes) wasn't an issue that was discussed around board tables at BHP and every other resource company in the world?

"Expenses such as these become part and parcel of the decisions you make."

Liberal senator Simon Birmingham said BHP's decision was the biggest blow to business confidence in SA since the state bank disaster of the 1990s.

"This is a blow that potentially could have been avoided," he said, adding that government policies certainly did not help.

They definitely had hurt the prospects of the project going ahead, Senator Birmingham said.

"They will be paying enormous additional taxes, funds they could have been investing in the Olympic Dam project," he said.

Opposition resources spokesman Ian Macfarlane said he gave Mr Abbott a "very good briefing" on BPH's announcement.

"The reality is that he (Mr Abbott) was already aware that the cost of removing the overburden in Olympic Dam is more than $50 million as a result of the carbon tax," Mr Macfarlane said.

"Yesterday's decision is further proof that this government is driving investors away from the resource sector in Australia."

Liberal MP Rowan Ramsey said BHP was choosing its words carefully when explaining why the project was cancelled.

"While they didn't expressly say it was the tax, they said it was the cost of doing business in Australia," he said.

"In the end, everybody speaks in code because they have to deal with those same parties the next day."

Labor MP Nick Champion dismissed as "nonsense" suggestions BHP was not totally upfront about the reasons behind its announcement.

"It's an excuse for a Liberal party that wants to relentlessly scare people," Mr Champion said.