The cost of dumping East West Link could have blown out by as much as $217 million because of a complex financial arrangement entered into by the state to shoulder finance risks of the thwarted project.

The revelation brings the total cost of cancelling the contract for the controversial project to at least $657 million.

The Treasury Corporation of Victoria, which manages the government's finances, has revealed in its annual report that it entered into an unusual deal with the Department of Treasury to guarantee against any losses associated with a massive $3 billion credit facility linked to the project.

Detail buried in the annual report reveals that, so far, the guarantee has cost the corporation $217 million, up from $191 million when the deal was initially locked in. The hidden blowout comes despite initial reassurances from the government that the cost of taking on the financial risks from the project would be negligible.