The Gold Coast Light Rail project is unlikely to be finished before the 2018 Commonwealth Games, with Prime Minister Tony Abbott refusing to fund the project.

Mr Abbott wrote to Queensland Premier Annastacia Palaszczuk on Friday and said he would not fund stage two of the project - from Southport out to the main train line to Brisbane - unless the Queensland Government sold assets.

Qld premier says the prime minister has informed her that the federal government doesn't intend to provide any funding for the second stage. Credit:Glenn Hunt

Queensland's Labor government made it clear before the January 2015 election that it would not sell assets.

Most recently Mr Abbott told Ms Palaszczuk at a private meeting during the recent COAG meeting to submit a business case and request funding as a "Commonwealth Games enhancement".