Godwin Grech, a man of Maltese descent who was the cause of a political furore in Australia which led to calls for the resignation of Prime Minister Kevin Rudd, has admitted to creating a "fake e-mail". But he still insists the e-mail was inspired by an original one which has now disappeared.

In the e-mail, Mr Rudd's economics adviser Andrew Charlton allegedly asked Mr Grech, the Treasury official overseeing a $2 billion government scheme, to assist a Queensland car dealer, John Grant.

This led to the Opposition Leader accusing Mr Rudd of seeking special treatment for the car dealer who was a benefactor of the Australian Labour Party.

Mr Grech admitted to Parliament that he created the fake e-mail but yesterday told The Australian newspaper that he did it to keep a record and was "confident that the sentiment of the exchange was accurate".

Speaking from a psychiatric ward, the 42-year-old said he made an error of judgment for creating the e-mail and sending it to Opposition leader Malcolm Turnbull who later asked Mr Rudd to resign.

Mr Grech is also alleged to have written questions for the Opposition Leader to ask in Parliament about Mr Rudd's denials that he had not sought special favours for the car dealer.

The Australian government is calling on the Opposition Leader to resign if his allegations are not substantiated, and an auditor's report due today is expected to clear Mr Rudd of any wrongdoing.