PM Malcolm Turnball has rejected a claim by Archbishop of Sydney Glenn Davies, one of the country's most senior Anglican leaders, that the government promised funding worth millions of dollars for the Church to campaign against gay marriage.
The leader was quoted by The Guardian newspaper as saying: "Any public funding, whatever the nature or terms may be, will be scrupulously equal as between the 'yes' case and the 'no' case, as you would expect."
Head of the Australian Christian Lobby group, Lyle Shelton, came to Archbishop Davies' defence, insisting the Anglican leader's memory of a meeting where the funding pledge was allegedly made was true.
Writing on Twitter, Mr Shelton said: "The Archbishop's recollection is correct. I was there. We can't let foreign donations buy our vote, like Ireland's."
Mr Turnball is expected to announce on Tuesday details of the referendum, which is scheduled for later in 2016 and will give voters the opportunity to decide whether same sex marriage is legalised in Australia.
Currently marriage is defined in Australian law as "the union of a man and a woman to the exclusion of all others, voluntarily entered into for life".
If the 'yes' and 'no' sides in the vote are each given $10 million for campaigning, as suggested in media reports, the total cost to taxpayers of the vote could reach $180 million.