Gerry Kite, 79, of Legana, served in the RAAF for 20 years, following a 10-year stint in the United Kingdom's Royal Air Force. He moved to Tasmania in 1989.

"I didn't know about Teddy Sheean until I came down to Tasmania," he said. "And that's when I took a bit of interest in [his story]."

"When it comes to conspicuous bravery and devotion to duty, he showed all those traits in that engagement for sure - and more.

"All the vets that I mix with and all the ex-military people, they're all of the same mind - they believe he should have received a VC."

The late Sheean was just 18 when he strapped himself to an anti-aircraft gun on the HMAS Armidale amidst an attack off the coast of present-day East Timor in December 1942, making a heroic last stand. He shot down at least one Japanese bomber as the surviving Armidale crew members abandoned ship.

Advice from the Defence Honours and Awards Appeals Tribunal said Sheean should be awarded a VC, but the federal government announced last week that it would not be adopting the tribunal's recommendations due to a lack of compelling new evidence to support Sheean's case.

Mr Kite said Prime Minister Scott Morrison "obviously has to back down on his decision".

"In the old days, going back to World War I and World War II, there was this great difference between the officer cadre and the other ranks," he said.

"Generally speaking ... it was the officers that received the VCs.

"There was a terrible class system, even when I joined up. The officer cadre, they looked down their noses at the enlisted man."

State Veterans' Affairs Minister Guy Barnett, who has headed up the Sheean VC campaign for 17 years, said the state government had contacted Mr Morrison to seek advice on what could be done to enable Sheean to be awarded the honour.

"The veteran community has been particularly concerned that the independent tribunal decision has been overturned," Mr Barnett said.