Labor has vowed to set up to a new independent body, Infrastructure Victoria, to ensure the state has a steady pipeline of major projects to meet the city's long-term demands.

Butthe government concedes the agency could recommend developing the East West Link – and in turn, the government would be required to consider the project on its merit.

The admission was made by Special Minister of State Gavin Jennings, who will introduce legislation this year to formally set up the new authority, describing it as "part urban planning body" and "part economic modelling agency".

"It's an agency that understands how you piece all these things together, and then, from those platforms, you make sensible decisions about how and when you should roll out your infrastructure programs," Mr Jennings told The Sunday Age.

However, when asked what would happen if Infrastructure Victoria identified an east-to-west tunnel as one of Melbourne's pressing transport needs, Mr Jennings said that whatever recommendations were made, "the government would need to account for that within its longer-term strategic planning and investment".

"In your example, they may suggest that within a 15-year timeframe it may be within the top five priorities," he said. "Then I think it would be wise of a government to ... make investment decisions in the longer-term which are consistent with that, rather than run against it."

The comments are reminiscent of views expressed by Mr Andrews before November's election, when he did not rule out revisiting the idea of an "East West Link-type" connection if Infrastructure Victoria recommended such a project in the future.

Since then, the Premier has insisted the road will not be built under any circumstance, and has been locked in negotiations attempting to extricate the state from the contract signed by the consortium and the former Napthine Government.

Critics have accused the Premier of walking away from a project that many believe is inevitable, potentially spending hundreds of millions of dollars worth of compensation in the process.

The Sunday Age can also reveal that Victorians will be slugged millions of dollars for a series of oval and park upgrades that took place in preparation for the East West Link, even though the road is no longer going ahead.

Under a deal between the Linking Melbourne Authority and the City of Melbourne last year, the council was granted $13.1 million to accommodate the relocation of several sporting clubs affected by the road.

Five grounds were identified for reconstruction and other works, including Flemington Road Oval and Princes Park – which are nearing completion – and Walker, Crawford and Poplar ovals, which were due to begin  this year. The government has confirmed it will reimburse the council for the work done so far.

"Daniel Andrews is all over the shop on East West Link contracts," opposition leader Matthew Guy said. "One minute he's trying to tear up contracts and the next he's claiming some are valid. This reckless approach is costing us vital infrastructure, jobs and making traffic congestion worse."