The Senate should investigate a scheme which saw $9.19 million of taxpayers' money wasted on a failed carbon farm that was supposed to make Rupert Murdoch’s News Corp carbon neutral, according to Liberal Senator Bill Heffernan.

His call came as Fairfax Media learned nearly $4 million of taxpayers' money will not be recovered from the $9.19 million originally outlaid to News Corp-backed company RM Williams Agricultural Holdings in a Caring for Country grant in 2011.

RM Williams Agricultural Holdings Pty Ltd had sought to use the money to set up the world’s largest carbon farm as part of a secret deal to provide enough carbon credits to make News Corp carbon neutral.

Changed tune: Rupert Murdoch.

But the farm, on Northern Territory cattle station Henbury near Alice Springs, never eventuated and RM Williams Agricultural Holdings collapsed owing more than $50 million to Westpac, $30 million to News Corp as well as a number of private investors including a company associated with a wealthy Tasmanian based businessman, Piers Dawson-Damer.

Receivers last month reached an agreement to sell Henbury cattle station for between $6 and $7 million, with 75 per cent of the proceeds to be returned to the federal government to pay back part of the grant, Fairfax has learned.

The sale means that close to $4 million has not been recovered by the federal government.