SYDNEY: The Reserve Bank of Australia will not sign any new contracts with PricewaterhouseCoopers (PwC) Australia until a scandal over the firm's misuse of confidential government tax plans is sorted out, the central bank's governor said on Wednesday.

The "big four" firm is on the defense after a former Australian tax partner who was consulting with the government on laws to prevent corporate tax avoidance shared confidential drafts with colleagues to drum up business around the world.

It faces missing out on lucrative Australian government contracts as a growing chorus of politicians, ministers and officials call for PwC to be blacklisted until it satisfactorily responds to the scandal.

As of May 16, the government had committed to contracts worth A$255 million ($173 million) with PwC in the current financial year alone, a finance department official told a parliamentary hearing last week.

Reserve Bank of Australia (RBA) Governor Philip Lowe told senators on Wednesday he was "appalled" by the breach and the RBA would not line up PwC for any work until the bank was satisfied the issue had been resolved.

"(We) have taken the decision to enter no new contracts with PwC until a satisfactory response has been forthcoming," Lowe said.

"A satisfactory response includes both complete transparency and accountability for those involved."

Australian Prudential Regulation Authority (APRA) chair John Lonsdale told the hearing ethics would be a "key factor" in any future procurement. The authority has one contract with PwC expiring in about two weeks, he said.

APRA had also spoken with major Australian banks about their ties to PwC, as recently as last week, added Lonsdale.

"If you're dealing with an entity with ethical issues there are prudential, reputational standing issues," he said.

His comments came a day after Treasury Secretary Steven Kennedy said the breach was "clearly disturbing" and the department would review a PwC audit contract worth almost A$1 million that expires this year.

The firm's acting CEO Kristin Stubbins, who took the job after her predecessor resigned earlier this month, on Monday apologised in an open letter and said nine unnamed partners had been directed to take leave.

PwC has said it would not comment on the hearings beyond the statement issued on Monday. ($1 = 1.4743 Australian dollars) (Reporting by Lewis Jackson; Editing by Sonali Paul)