The Victorian Premier has accused Malcolm Turnbull of being a Sydney-centric Prime Minister who has ripped off the state by failing to fully fund upgrades to regional rail services.

The State Government says plans for a $1.45 billion regional rail overhaul are now in jeopardy.

Victorian infrastructure spending ($1b): $100 million for the Geelong rail line

$100 million for the Geelong rail line $100 million for the North East rail line

$100 million for the North East rail line $195 million for the Gippsland rail line

$195 million for the Gippsland rail line $95 million for upgrades to the Avon River Bridge

$95 million for upgrades to the Avon River Bridge $10 million for a Shepparton line planning study

$10 million for a Shepparton line planning study $30 million for the development of a business case for Melbourne Airport Rail Link

$30 million for the development of a business case for Melbourne Airport Rail Link $20.2 million in additional funding for upgrades on the Murray Basin Rail line

Premier Daniel Andrews said the budget ignored the Commonwealth-states Asset Recycling Initiative, under which Victoria believes it is owed the $1.45 billion following the sale of the Port of Melbourne.

He said the budget showed Malcolm Turnbull was "without any shadow of a doubt, the prime minister of Sydney".

"We laid out a clear plan for a revival, an improvement and upgrade to every single passenger line across regional Victorian, and the Prime Minister said 'no'," Mr Andrews said.

"At the same time, under exactly the same agreement, the asset recycling agreement, New South Wales received every single dollar they were owed for projects of their choosing."

The Victorian Government recently announced an upgrade for 142 new services to the V/Line train network, but said it would not go ahead without the $1.45 billion in federal funds.

The federal budget instead included $500 million for regional rail upgrades in Victoria, including the north-east line to Wodonga, the Gippsland line, and the Geelong line's duplication to Waurn Ponds.

"Now we're going to have to go back through each of those [V/Line] projects and carefully consider what can be delivered," Mr Andrews said.

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"You can't do $1.45 billion worth of rail upgrades with about $500 million, that's how much the Turnbull Government would have us allocate to regional rail."

The Victorian Government's original plan included 69 extra services to Geelong, and 18 each for the Ballarat, Bendigo and Gippsland lines.

Extra services would also have gone to Shepparton and Ararat.

The budget contained an overall infrastructure spend in Victoria of $1 billion.

Along with the $500 million for regional rail upgrades, it also includes $20.2 million for Murray Basin Rail and $30 million to develop a business case for a rail link to Tullamarine Airport.

Premier's 'hissy fit'

Darren Chester, the federal Minister for Infrastructure and Transport, said the money from the asset recycling fund had been in dispute for the past 12 months because Victoria had failed to meet the June 30, 2016 deadline.

"So having failed to meet the deadline, I was able to negotiate for the money to remain in the contingency reserve and now there's $1 billion made available to the Victorian Government in last night's budget," he said.

He said rather than being "pig-headed and stubborn" the Victorian Government should sit down and negotiate how to get the money working.

"I would think the Premier, when he calms down and gets over his little hissy fit, will give me a call and we'll work our way through how we can spend that $1 billion," Mr Chester said.

"There's also a pathway through more money through the national rail program. There's $10 billion in the national rail program that Victoria can bid into.

"So let's put aside these silly little political games sit down and work with me about how we spend the first $1 billion."

Mr Chester said he had not been given a single plan for the regional rail upgrades, only a one-and-a-half page letter, with no indication of how much the state would be willing to contribute.