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Illustration: Ron Tandberg

Illustration: Ron Tandberg

Virgin Australia's efforts to raise foreign funds to give it the firepower to take on Qantas four months ago sparked a flurry of activity on the same day between Joe Hockey's most senior advisers and top Treasury mandarins.

A freedom-of-information request from Fairfax Media has uncovered a long paper trail, although Treasury has kept secret almost all of the documents between the department and Mr Hockey's office from September 12 to December 3 relating to Qantas.

The email trail reveals high-level internal discussions were well thought through in the lead-up to Mr Hockey's apparently off-the-cuff comments in late November about the need for a debate about the future of Qantas.

It also reveals the Treasurer - who has been the most receptive minister to Qantas' pleas for financial assistance, and his office, have closely monitored Qantas' situation for months.

In contrast, correspondence obtained under FOI laws between Transport Minister Warren Truss' office and bureaucrats over the period shows no mention of Qantas beyond whether its planes arrived on time or statistics such as fluctuations in fares. Mr Truss has maintained a hard line on a bailout.

Qantas also changed its position on the carbon tax's impact on its operations, describing it is as ''among the significant challenges we face'' and revealing that the levy cost the company $59 million in the first half of the year and $106 million in 2012-13. Earlier this week, the airline said its problems ''were not related to the carbon tax''.

Mr Hockey and Prime Minister Tony Abbott dismissed suggestions the government had pressured Qantas to backtrack.

As early as October 21, a departmental liaison officer in Mr Hockey's office was emailing a Treasury manager about Qantas. Two days later, a departmental analyst issued a long response.

On November 14 - the day of Virgin's $350 million capital raising - there was a spate of emails between Mr Hockey's chief of staff, Grant Lovett, and Treasury's executive director and general manager.

The following week, Qantas launched a campaign attacking Virgin that included a leaked letter from Qantas chief executive Alan Joyce to Mr Abbott and Mr Truss.

On the day the leak was published, Mr Hockey's chief of staff exchanged emails with the Treasury's executive director. A day later, a Treasury analyst replied with an 18-page email to Mr Lovett.

Over the following week, in the lead-up to Mr Hockey's call for a national debate, there was another flurry of emails, including a 19-page document from Treasury.

A number of emails were exchanged the day before news broke that Qantas wanted a government guarantee.

The emails demonstrate the Treasurer was keeping an unusually close watch on the fate of the carrier and carefully monitoring media reporting of the situation.

A spokeswoman for the Treasurer confirmed the emails related to Virgin's capital raising, and possible approval from the Foreign Investment Review Board.

Mr Hockey said on Wednesday that Qantas had been ''very agreeable'' to assisting the detailed analysis undertaken by government on its case for either a debt guarantee or an unsecured loan for $3 billion.

The Treasurer said both options were no longer on the table as he warned union leaders against industrial unrest as the airline cuts 5000 jobs.

Qantas boss Alan Joyce is likely to be called before a snap Senate inquiry that Labor will launch into the airline that would examine what steps could be taken to ensure Qantas remained a strong national carrier.

With Anna Patty