Ron Merkel, QC, and law firm Maurice Blackburn are considering whether the state government has engaged in misleading and deceptive conduct in relation to its secretive business case for the $6 billion to $8 billion road project.

They are working on a pro bono basis with local group Residents Against the Tunnel (RATs), which announced the possibility of a legal challenge at a community meeting on Sunday.

It is understood the legal team could argue the Coalition has breached national competition laws by presenting a business case that is fundamentally flawed and misleading.

There are concerns the business case is not based on reasonable grounds and the traffic modelling does not stack up.

But a government spokeswoman said the project's business case was robust and comprehensive, and indicated there was a $1.40 benefit for every dollar spent.

''The east-west link business case is underpinned by modelling and assessment by internationally recognised experts, which has been further subject to independent peer review,'' she said.

If the legal case progresses, the government could be forced to hand over the business case. A damaging legal stoush also has the potential to delay the project until after next year's state election.

The Coalition has promised to sign contracts for the project just weeks before the poll, while Labor has vowed the project will not proceed if the contracts are not signed and it wins the election.

Maurice Blackburn lawyer Elizabeth O'Shea said the matter was ''extremely preliminary … we are planning on investigating whether the matter has merit''.

The resident group's spokesman, Collingwood resident Thracy Vinga, said the project was a waste of money, would dislocate the community and not alleviate traffic congestion. ''If they have nothing to hide, then why aren't they providing the details? We want the government to come clean.''

Socialist Yarra councillor Stephen Jolly said the possibility of legal action was heartening for residents. ''The fact that a former Federal Court judge thinks there is potentially some legs in this really underlines what everyone thinks - that this project has been rushed through for political purposes.''

News of the potential legal action came as police on Monday morning disbanded a group of about 30 protesters who had gathered at a North Carlton site to disrupt test drilling for the east-west project.

With Rania Spooner, Adam Carey