Premier Denis Napthine's own department was directly involved in recommending a $1.5 million grant to assist expansion plans by a wealthy businessman who co-owns a racehorse with the Premier.

Both the Premier and Regional Development Minister Peter Ryan have sought to distance Dr Napthine from the grant at the heart of a conflict-of-interest row over Premier's multiple connections to Warrnambool meat mogul and racing enthusiast, Colin McKenna.

Denis Napthine and Colin McKenna at the announcement of the grant. Credit:Damian White

But a briefing paper used by Mr Ryan reveals that the Department of Premier and Cabinet was one of five government departments that considered Midfield's proposal (dated January 17) and ''agreed to recommend the project for ministerial approval''.

Mr Ryan approved the application for the $1.5 million grant in full on February 25.