The Victorian Government has scrapped plans for a private hospital inside the new $1 billion Victorian Comprehensive Cancer Centre that was meant to be open for privately insured Australians and wealthy international tourists next year.

As part of a push to attract more medical tourists, retain the best doctors and boost its coffers, Peter MacCallum Cancer Centre last year won approval from the liberal government to include a new 42-bed "Peter Mac Private" hospital inside the new cancer centre, which is due to open in Parkville in 2016.

The Peter MacCallum Cancer Centre. Credit:Jason South

In May, Dale Fisher, CEO of Peter Mac, said three private hospital operators — Healthscope Ltd, Lifehouse Australia Ltd and Ramsay Health Care Ltd — had been shortlisted to fit out and operate the private hospital on the 13th floor of the centre.

But on Thursday night, Victorian Health Minister Jill Hennessy said the Labor government did not believe a "Peter Mac Private" was in keeping with the "heart and the soul" of the Victorian Comprehensive Cancer Centre — a world class, publicly-funded hospital and research facility the former Labor government commenced in 2009.