The highest defence honour could still be awarded to Tasmanian Ordinary Seaman Teddy Sheean if the Prime Minister orders that a tribunal's findings be set aside, says former Liberal senator Guy Barnett.
Mr Barnett said the Defence Honours and Awards Appeals Tribunal inquiry into 13 Australian Victoria Cross nominees was flawed, because it superimposed its own guidelines on to the government's terms of reference, describing the outcome as a ''whitewash bordering on a charade''.
A tribunal spokesman said yesterday it had decided it was necessary to develop guidelines to help it make recommendations.
However, it said those guidelines meant it needed to apply the rules as they were at the time. It said Ordinary Seaman Sheean's actions had only met the criteria to receive a posthumous mention in dispatches, which were received.
Ordinary Seaman Sheean's actions ''displayed conspicuous gallantry but did not reach the particularly high standard required for the recommendation for a VC''.
Latrobe's Ordinary Seaman Edward ''Teddy'' Sheean went down with HMAS Armidale in the Timor Sea in December 1942. He strapped himself to the ship's gun and shot at enemy planes as the ship sank.
Nephew Garry Ivory, of Launceston, and other family members yesterday vowed to fight on for a VC for his uncle.