Victoria's water agency is suppressing documents detailing how managers have spent millions of taxpayer funds, saying disclosure could cause ''stress or anxiety''.

The Office of Living Victoria - staffed by former Coalition advisers and under investigation by the Ombudsman for its controversial procurement practices - has ruled that all email correspondence between its senior officers, Water Minister Peter Walsh's office and two government departments about budgetary matters cannot be released.

Water Minister Peter Walsh. Credit:Leanne Pickett

The OLV refused freedom-of-information applications from Fairfax Media, saying it was not in the public interest to release emails written by senior staff because this could ''cause a person stress or anxiety'' and the ''individuals involved would not wish to have their information disclosed without their consent''.

Victorians have paid millions of dollars to staff the OLV with political appointments and several well-connected consultants. Most got their jobs without competition.