News was paid the money after winning a long-running legal battle with the Tax Office relating to a 1989 restructure of the media empire involving billions of dollars and a company in tax haven Bermuda.

The ATO had refused to allow the deduction but News Corporation defeated it in the full Federal Court in July and the money began flowing to the company over the Christmas-New Year break.

Mark Zirnsak, who is the Australian representative of advocacy group Tax Justice Network, said the payout ''highlights the urgent need for reform of the global tax rules''.

''Multinational companies should not be able to use their legal structures involving tax havens to dodge tax in ways that nationally based companies cannot,'' he said.

The payout represents a significant proportion of the $16.8 billion deterioration in the federal budget announced by Treasurer Joe Hockey in December.

It all but wipes out $1.1 billion in savings announced by Mr Hockey when he unveiled the mid-year economic and fiscal outlook on December 17. Mr Hockey did not mention the payout at the time.

Asked why Mr Hockey did not mention the financial blow, a spokeswoman said: ''The speech on the day was about detailing the broad fiscal mess the government had inherited.''

Assistant Treasurer Arthur Sinodinos declined to comment, citing taxpayer secrecy laws.

In 1989 News Corporation was in the grip of a debt crisis that in 1990 brought it to the brink of collapse.

News owed about $239 million more than it had in assets.

By taking out fresh loans funded by moving around ownership of the US operation and its half-stake in Bermuda-registered News Publishers Limited, which owned part of the South China Morning Post, News hoped to make itself more attractive to banks.

The restructure was funded by two cheques, totalling $3.27 billion, drawn on the account held by subsidiary News Finance at the Pitt Street, Sydney, branch of the Commonwealth Bank. However, the money, plus an additional dollar, flowed back into the account the same day the cheque was drawn.

News subsequently claimed deductions for foreign exchange losses incurred because it later paid back loans denominated in US dollars in Australian dollars, which had fallen in value.

A panel of judges decided in favour of News Corporation on July 25, but the money did not immediately flow because the ATO was still able to appeal. The ATO's 28-day window to mount an appeal coincided with the federal election campaign, during which Mr Murdoch's newspapers campaigned against Labor.

Under the terms of a deal struck when News was split up last year, the money has been paid to News' sister company 21st Century Fox.