Prime Minister John Howard told an Australian Radio station he does not trust Australian brewers to pass on refunded beer taxes to charity, if the senate vetoes a controversial rise in beer excise.

"They have run a very dishonest campaign on this," Howard told Sydney Radio when interviewed about the pledge by brewers to put any windfall into a trust fund for charities if the government abandons the rise in beer excise.

Corporate affairs manager for Lion Nathan, Gabriel McDowell said that breweries had stated all along that if the beer excise increase were to be reversed, the money that is returned to them would go into a fund to be distributed to charity.

Howard said if the senate did not pass the beer bill, the $185 billion in beer tax that had already been collected would have to be returned to breweries and not to drinkers.

But, the breweries regard the money as belonging to drinkers, not the brewing companies said a spokesman for the Australian Associated Brewers (AAB).

The spokesman also said that the breweries were not interested in keeping the money if the beer excise was overturned. And "The charitable foundation would have to be truly independent and audited," he said.