Prime Minister Kevin Rudd has given Opposition Leader Malcolm Turnbull until today to produce the email at the centre of the ''utegate'' scandal or resign.
And Mr Turnbull, while stepping back from allegations about Mr Rudd's involvement in the affair, has taken aim at Treasurer Wayne Swan, demanding he resign for misleading Parliament.
Mr Rudd's comments come in the wake of explosive allegations that Queensland car dealer John Grant, a friend of Mr Rudd's, was helped to obtain finance through the OzCar scheme at a meeting between Ford Credit and Treasury officials.
The Senate is expected to debate the Car Dealership Financing Guarantee Appropriation Bill tomorrow which, if passed, will establish the $2billion OzCar fund.
Mr Rudd said the clock was ticking for Mr Turnbull to produce the email which would prove inappropriate behaviour by his office.
''The case against the Government myself and the Treasurer is based on an accusation that I directed that representations be made on behalf of Mr Grant,'' he said.
Mr Rudd said neither he nor his staff had sought to intervene in Mr Grant's case.
Motor Traders Association of Australia executive director Michael Delaney said yesterday Mr Grant had not been given special treatment in his application for car finance funding through the OzCar scheme.
''The treatment Mr Grant ... got was no different from the treatment all my other members got,'' he said.
Full coverage and analysis in today's Canberra Times