The proposal was to build three-storey concrete station car parks at Werribee, South Morang and Craigieburn, three of the fastest-growing suburbs in Melbourne. Each of the three stations already experiences high demand for commuter car parking.

The prefabricated structures would have enabled about 500 more commuters per day to park at each station.

The unsolicited proposal - which has not been made public until now - also included office space and affordable housing within the buildings.

Construction company Versatile Projects submitted the proposal to the former Napthine government in October, after answering an initial request from Metro and Public Transport Victoria, which asked the private sector in June last year to pitch concepts for multi-deck car parks as a way "to encourage more motorists to use the train".

The proposal was submitted to the Coalition government, but sat with the Department of Treasury and Finance for several months after the Andrews government won office in November.

A spokesman for Treasurer Tim Pallas said Labor ultimately rejected the concept in April because it lacked "uniqueness", a key criterion for approval under its guidelines for market-led proposals.

Two councils that worked on the proposal said on Monday they were disappointed by the government's decision to kill it off, saying the railway stations were "crying out" for more parking.

Shadow treasurer Michael O'Brien accused the government of failing to act on a clear need, thereby ensuring more people who might otherwise take the train will continue to drive to work.

"While Metro is crying out for additional parking capacity at suburban stations, the Andrews government is failing to act," Mr O'Brien said.

"Rejecting innovative, cost-effective proposals for train station car parking is sadly typical of this Labor government."

The government has committed $20 million to convert government-owned land into railway car parks, but has no plans to build multi-storey car parks.

Griff Davis, director of advocacy at the City of Whittlesea, said South Morang station's 450-space car park had been inadequate from day one.

"With the ever increasing outwards growth of Melbourne, we must start to seriously consider going upwards," Mr Davis said.

"Many eminent planners support greater density around transport centres and although the private market is prepared for that, government seems more reluctant. Whether it's a lack of funding or vision or both, allowing the private sector to have a go would be beneficial."

Trisha Love, a spokeswoman for the City of Wyndham, said the council believed Werribee station was a prime candidate for a multi-deck car park.

"We've got a CBD that's crying out for more car parking, particularly long stay," Ms Love said.

Rail patronage data from Public Transport Victoria reveals driving is the primary mode for travelling to Werribee, South Morang and Craigieburn stations.

Lee Kuzmanovic​, chief executive of Versatile Projects, said the company had put months of work and hundreds of thousands of dollars into preparing its proposal, and felt the government's justification for rejecting it was weak.

"The government has offered opportunity for innovation and job creation models to come forward through business. Now we did that, we came back with an unsolicited bid that created jobs, direct and indirect, and met a clear need," Ms Kuzmanovic said.

A multi-deck car park is being built at Syndal station, at a cost of $10.8 million. Its 250 spaces will cost $44,000 each, but Ms Kuzmanovic said the prefabricated design she had proposed would have cost $30,000 per space.

The modular design also meant car parking bays could be converted to apartments or office space in future, if demand for parking declined, she said.