Some politicians are up in arms about a potential sale

The airline said the bid, which was made last month, was inadequate.

Speculation about the future of Qantas has proved controversial, with unions and some politicians saying a bid could result in thousands of job losses.

But Prime Minister John Howard has insisted his government will not stand in the way of a deal nor alter ownership laws to block a bid.

Current ownership laws mean that no investor can own more than 25% of the firm's shares while no foreign company can hold a majority stake.

To meet these requirements, Macquarie had brought on board a wide range of potential partners including private equity firm Texas Pacific and Canadian firm Onex.