What seemed like an innocuous error has become a scandal in the healthcare bureaucracy after a potential conflict of interest in the Health Department.

The chief of staff to Assistant Health Minister Fiona Nash asked the Health Department on Nash’s behalf to remove the new Australian food rating website just hours after it went live.

The site detailed new information and an improved rating system for Australian consumers to make better nutritional choices.

It has now emerged that the Assistant Health Minister’s former chief-of-staff, Alastair Furnival, is the co-founder of Australian Public Affairs - a lobby group that represents Cadbury, Kraft, the Australian Beverages Council and others.

Mr Furnival is also married to the owner of the lobby, Tracey Ann Cain, Fairfax Media outlets say.

He resigned from his post last Friday in the fallout of the revelations.

When asked about the subject by Labor's leader in the Senate, Penny Wong last week, Senator Nash said; “There is no connection whatsoever between my chief-of-staff and the company Australian Public Affairs.

“My chief-of-staff has no connection with the food industry, and is simply doing his job as my chief-of-staff.”

The Australian Government Statement of Standards specifically states that all ministerial staff must divest themselves of interests in any business involved in the same area as their minister's responsibilities.

In a concurrent Parliamentary sitting, Opposition frontbencher Tony Burke asked the Prime Minister to comment on Mr Furnival’s posting.

Mr Burke asked; “Is the Prime Minister aware that Minister Nash did not disclose at the meeting of the Australia and New Zealand Food Regulation Ministerial Council, that the Minister chaired in December, that her chief of staff held a shareholding in a food industry lobbying firm, notwithstanding that conflicts to be declared were on the agenda?”

Mr Abbott replied: “I am sure that the member opposite is raising these matters because he is concerned to ensure that the ministerial guidelines have been fully complied with.

“I am concerned to ensure that the ministerial guidelines have been fully complied with as well.

“I will take the question on notice and if there is anything more to say I will say it.”

One senior Health Department official says she has been taken off direct control of the website after receiving a phone call from Mr Furnival demanding that the site be taken down.

Reports say the Prime Minister’s office knew of Mr Furnival’s involvement with the junk-food lobby, but had expected him to break his connections.