Transurban has been accused of trying to "extort" Victorian taxpayers after its builders on Melbourne's $6.7 billion West Gate Tunnel stood down hundreds of workers in an escalating dispute over cost blow-outs.

"You do have to question if this is a tactical move by Transurban and its builders in an attempt to in some way extort the Victorian government and by extension the Victorian community to help them sort out these issues, this is just unacceptable behaviour from these experienced companies," Victorian transport minister Jacinta Allan said on Tuesday.

The government, which is already pumping in $2.7 billion to help pay for the new tollroad's construction, is worried that it is being pressured into forking out extra money to pay for its completion, in the same way the NSW government was forced to spend an extra $600 million to finish Sydney's light rail after being taken to court by Spanish contractor Acciona.

Some 125 direct employees from CIMIC's CPB Contractors and John Holland were stood down on Monday and another 100 people sub-contracted to work on the project were expected to be stood down on Tuesday.

Work has stopped on parts of the West Gate Tunnel as a dispute between Transurban and its contractors escalates. Joe Armao

The contractors declined to comment on why workers were being laid off. It is understood that workers are being moved to other projects or given redundancies.

Transurban, whose income from toll fares has dropped due to people staying home during the pandemic but is still spending $4 billion on the new tunnel, said it was "extremely disappointed" that the joint venture was laying off people when there were options to keep staff employed.

"While there are challenges on the project, there are plenty of pathways forward to progress works and we urge the CPB John Holland joint venture to keep these people in a job," a Transurban spokesperson said.

The joint venture has a fixed price, fixed time contract to build the West Gate Tunnel and has responsibility for all staffing, construction and tunnelling works, according to Transurban.

But Ms Allan said that Transurban had hired the contractors and had to "get on" and resolve its problems.