Breaking:

Turnbull has admitted that there is no case for Prime Minister Rudd to answer. “The case that Mr Rudd misled the house about the communication is not sustained,” he told AM this morning.

Australian Federal Police have confirmed the email at the centre of the Utegate affair is a fake.

“A preliminary forensic investigation of computers located at a premises in Calwell and at the offices of the Department of Treasury has been undertaken,” the AFP says in a statement.

“Preliminary results of those forensic examinations indicate that the email referred to at the centre of this investigation has been created by a person or persons other than the purported author of the email.

“A 42 year-old Calwell man has been interviewed by the AFP in relation to this matter and it will be alleged that the interview is consistent with preliminary forensic advice.”

Earlier:

Bernard Keane writes:

Parliament has kicked off its consideration of the John Grant affair with standing orders being suspended to allow a debate over the fake emails and treatment afforded car dealer John Grant.

The debate commenced as the ABC broke the news that the house of Treasury official Godwin Grech had been raided by Federal Police and that a faked email had been found within Treasury’s system.

Word of the raid appeared to be slow to filter onto the floor of Parliament.  Shadow Treasurer Joe Hockey, apparently not understanding the meaning of the ABC report, commenced his speech by declaring that it showed that the Prime Minister was wrong when he said there was no email in Treasury.  Malcolm Turnbull himself, who led the Opposition attack, gave a poor performance and appeared distracted, lacking his usual forensic focus, and spent much of Hockey’s speech sitting staring at the Dispatch Box.  Both Kevin Rudd and Wayne Swan gave aggressive performances, with Rudd also singling out News Ltd for special criticism, particularly of Steve Lewis and the Telegraph‘s decision to run with the faked email on Saturday morning.  Swan also gave a solid defence of the attacks on him, again rejecting the claim that he had singled Grant out for special treatment and claiming he had provided similar treatment for car dealers represented by Nationals MP Kay Hull.

The tenor of the battle could be gauged from the respective backbenches.  ALP members were loud and in good voice, while nearly all of the Opposition sat quietly.

The most recent breaking news is, according to The Punch, that the AFP are investigating links in the affair between Treasury and Malcolm Turnbull’s office.

If there’s anything to that, it will be goodnight Malcolm.

This could have all gone so differently if Turnbull had shown some restraint.

Bizarrely the online face  of The Australian appears in denial of the reality of these unfolding events, insisting that the issue, in its latest reports, dwells entirely on debate over Swann’s role ignoring what is happening in the real world outside parliament.