The Australian Labor Party's advertising agency has been sacked by Prime Minister Kevin Rudd for offering "exclusive" interviews in exchange for pro-Labor advertisements and editorials in websites for the youth.

The deal only encouraged journalists to create entertaining content about the "inadequacy of the Liberal NBN plan". Fairfax Media's The Vine rejected the deal based on ethical grounds. Vice and Pedestrian.tv are two of the youth websites that received the proposal.

Naked Communications, an online youth-oriented advertising agency hired for the Australian Labor Party's campaign was said to gently persuade select media agencies to go with the deal.

The Labor party's national secretary and election campaign manager George Wright said he has never seen advertising for exclusive Rudd interviews deal. The document said to explain the terms of the deal bore the Australian Labor Party branding.

Wright said the advertising agency's actions were "completely unacceptable" and that he would personally apologise to the editor who was involved in the ad agency deal.

Previously, Wright said the Labor party will still employ Naked Communications but Prime Minister Rudd decided to terminate the services of the ad agency.

A spokeswoman for Kevin Rudd said that the prime minister will not tolerate such behaviour. In a statement, the spokeswoman said that the Prime Minister and his office did not authorise Naked Communications to offer exclusive interview deals in exchange for pro-Labor ads.

However, Fairfax Media has obtained emails suggesting the office of the Prime Minister was well aware of the ad negotiations.

A compromise agreement was proposed after Naked Communications executive Nick Kavanagh was told the deal was unethical by Alyx Gorman, TheVine's editor.

Kavanagh wrote in the email that he has yet to receive news from the Prime Minister's office. Meanwhile, both Naked Communications and the Australian Labor Party denied the alleged communications with the Prime Minister Rudd's office.

The briefing document was said to contain the terms and conditions of the Kevin Rudd interview. The contents of the document were described by an advertising executive as "gobsmacking".

The advertising deal includes a one-on-one interview with Kevin Rudd for 10 minutes. In exchange for the exclusive interview, editors would give away advertising space on youth-oriented websites and networks with ads relating to the Labor party's election campaign.

According to Brette Rolfe, Naked Communications' strategic head, the briefing document was "not discussed, authorized or reviewed by the Australian Labor Party". The document was prepared internally.

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