WA Attorney-General Michael Mischin has denied he had a deal with his federal counterpart to keep the Commonwealth out of the state government’s bid to claw back $1 billion from Alan Bond’s collapsed Bell Group.

His denial comes despite WA Treasurer Mike Nahan telling parliament the day after the High Court shot down the Bell Group legislation in May that the state government thought it had a deal.

The bill sought to propel the WA government to the top of the list of Bell Group creditors, shunting others including the Australian Taxation Office, but was deemed invalid because it was unconstitutional.

That argument was the crux of a submission by the ATO and was run by then Solicitor-General Justin Gleeson despite George Brandis telling him he’d assured Mr Mischin there would be no federal government involvement, The West Australian newspaper reports.

Mr Mischin rejected the claim he had an arrangement with Mr Brandis but said they spoke about the legislation when it became apparent it would be challenged, and there was a question of whether the ATO would intervene.

“I did speak to Attorney-General Brandis with a view to persuading him against that course,” Mr Mischin told reporters.

“He indicated to me, as presently advised, he was not inclined to intervene.”

A few days before the High Court hearing, however, Mr Mischin was told the Commonwealth would be intervening.

“I sought to have meetings between our legal advisers and the Commonwealth legal advisers in order to try to resolve some of the arguments and see whether the legislation could be preserved while addressing the Commonwealth’s concerns,” he said.

“But that proved unsuccessful.

“It did not run the argument in respect of the corporations law that I understood was causing the trouble. In fact, it ran the arguments that the ATO wanted to run and for which it would have required leave to intervene.”

But the Federal Opposition is calling for Mr Brandis to be sacked over the reported “secret deal”, which reportedly unclouded a direction to the then solicitor-general, Justin Gleeson, not to “run a particular argument” in court.

The West Australian‘s report claims the deal was scuttled by Mr Gleeson, who wrote a scathing submission to the High Court on behalf of the Australian Tax Office — which was separately trying to claw back $300 million — and that this strengthened the case against WA.

Mr Gleeson’s intervention reportedly led to a “blazing row” between Senator Brandis and his West Australian counterpart Michael Mischin, and contributed to the break-down in the relationship between Mr Gleeson and Senator Brandis.

Shadow attorney-general Mark Dreyfus described the story as “extraordinary” and said it appeared Senator Brandis had favoured “the political interests of the West Australian Liberal Party” over his duty to the Commonwealth.

“The story suggests that he has directed, or sought to direct, the former solicitor-general, Justin Gleeson, to not run an argument in the High Court of Australia in a case that concerned a special act from the West Australian Parliament, which the Commonwealth tax commissioner said was invalid,” he said.

“He’s got to go and Mr Turnbull needs to act.”

Finance Minister Mathias Cormann dismissed the call, saying Mr Dreyfus and Opposition Leader Bill Shorten had a long history of “over-reach” when it came to the Attorney-General and were “just getting ahead of themselves”.

Mr Gleeson resigned last month after a public brawl with Senator Brandis over the Attorney-General’s decision to issue a legal directive forcing all Government agencies and ministers to first seek his written approval before going to the solicitor-general for legal advice.

That directive was issued after the High Court hearing but was repealed earlier this month.

A spokesman for the Attorney-General said the Government did not comment on litigation in which the Commonwealth was a party.

– ABC