The West Australian government has rebutted opposition claims that it has wasted more than $3 million on an old house for Perth's deferred light rail project, which could still be permanently shelved.

Labor says the state government has spent $3.025 million on an abandoned, dilapidated house on Thomas Street in West Perth to make way for the MAX project, which is now “as good as dead”.

Opposition planning spokeswoman Rita Saffioti says $25 million was also spent between 2011 and 2014 on planning and consultants, including concept drawings, computer animation and artists’ impressions.

“The Liberals don’t have a public transport plan, they have a propaganda plan for the next election,” she said.

Ms Saffioti said Labor’s rival Metronet project was needed “more than ever”.

“Only WA Labor has a clear and consistent plan for public transport to tackle congestion,” she said.

But Transport Minister Dean Nalder says the opposition has its facts wrong.

“This land has been purchased for the purposes of easing congestion,” he said.

“It was purchased for the potential future upgrading of Thomas Street to three lanes each way.”

The minister also denied planning funds had been wasted, saying the plans continued to be the base of all research.

Mr Nalder revealed this week he was in favour of an underground heavy rail system for Perth’s northern suburbs but was still exploring all options.

If the MAX project does go ahead, construction is tipped to begin in 2019 for completion by 2022