The Department of Finance executive who told a staff member to deliberately give a journalist "vague" information about renovations at The Lodge says it "was not my finest moment".
Staff in Prime Minister Tony Abbott's office hid information about the $4.5 million renovation of The Lodge from the public by blocking the release of details asked for in a freedom of information request.
But the attempt to reduce information given to the community was made public upon the release of an email from a manager at Finance, John Owens, who told a staff member: "Don't identify the Prime Minister's Office as the decision makers, just leave it vague."
Fronting an estimates hearing on Thursday, Mr Owens, first assistant secretary in the property and construction division, said: "It was, in retrospect, not the most felicitous thing to say.
"We'd conferred with [the Department of Prime Minister and Cabinet, which had passed on the message from the Prime Minister's Office) that the journalist was not to have access and, wishing to keep the mechanics of that less than public, I sent that email, and perhaps in retrospect it was not my finest moment."
Mr Owens and his finance colleagues also told the hearing The Lodge would still contain asbestos when the work was finished.
This was despite the fact that the overarching renovation contract had been varied eight times, mostly because of the discovery of previously unknown quantities of the dangerous material.
There will still be asbestos sheeting in the residence when the Prime Minister moves back in, which will be safe as long as it is not disturbed.
Mr Owens told senators that asbestos had been found "pretty much everywhere", including around hot water pipes, in electrical conduits, in the roof and walls, as sheeting in the attic and in the basement and the laundry.
Comcare has been notified about the new discovery of asbestos or incidents at the site 11 times.
A car smashed through the wall of The Lodge in March and the hearing was told the crash also damaged a carport behind the wall.
The Finance Department is fixing the wall so it is returned to its previous standard. A review is under way into the external security of the Prime Minister's official Canberra residence, which observers have criticised.
Prime Minister Stanley Melbourne Bruce first moved into the colonial revival-style home, which was designed by architects Oakley and Parkes, in 1927.
Former prime minister Julia Gillard told journalists that possum urine was once observed making its way down the dining room wall during the visit of a foreign leader.
Mr Abbott has opted to stay in a $110-a-night room at Australian Federal Police College in Barton while the renovations are completed.
Taxpayers forked out $120,000 in dead rent as well as lease-termination and legal fees for a $3000-a-week Forrest house that Mr Abbott has not used, which was chosen by the Department of Prime Minister and Cabinet during the pre-election caretaker period.