A bipartisan call to increase the Newstart allowance was removed from a parliamentary report at the direction of the Morrison government on the eve of the federal election.

As Prime Minister Scott Morrison stares down growing demands by Coalition MPs to lift the unemployment benefit for the first time since 1994, The Sydney Morning Herald and The Age can reveal former social services minister Paul Fletcher intervened in an inquiry to erase a major recommendation that would have turbo-charged the sensitive issue.

The probe into the causes of long-term welfare was established by the government in mid-2018 to investigate why some Australians become trapped in the system.

The draft final report - agreed to by MPs from the Coalition, Labor and crossbench - contained a specific call to lift the Newstart payment for singles and families.