Prime Minister Julia Gillard insisted on Thursday that Ken Henry's scheduled entry to the National Australia Bank (NAB) board will not run in conflict with the former Treasury secretary's present role as government economic adviser.

NAB chair Michael Chaney has announced that Henry will join the giant bank, one of the so-called Big Three in Australia, as a non-executive member of its board, a prospect that immediately drew criticism from the Coalition.

Opposition assistant treasury spokesman Mathias Cormann expressed his deep reservation on Henry's new NAB post, which according to Chaney will officially begin on Nov. 1, as the Liberal Senator wondered if his conflicting responsibilities both in the government and in the private sector would lead to serious complications.

"Very clearly there is a serious potential for conflict of interest given the very senior role he holds in government, drawing a significant salary from the public purse, while at the same time taking on a senior role such as this in a major corporation," Cormann was reported by The Australian as saying.

Ms Gillard, however, downplayed the Coalition concerns stressed that Cormann's beef Henry's dual role is mostly unfounded and therefore "cannot be sustained."

In a decision she made public last week, Ms Gillard tapped the expertise of Henry to conduct a review that she said will be used by Australia in dealing with the shifting powers of global economies - from the European and American regions to that Asian nations such as China, India, Japan and South Korea.

The new white paper, according to the Labor-led government, will prepare Australia for an emerging global economic picture, in which China, the country's biggest trading partner is projected to dominate the global stage, and is expected to be completed by the mid-part of 2012.

Ms Gillard clarified that while Henry will be funded and issued salary from government coffers, his new role is not covered by the Australian Public Service code, which prohibits anyone working for the state to take on private company positions that would encourage the incidence of conflicting interests.

She also pointed out that "any suggestion of a conflict between Dr Henry's government and non-government roles cannot be sustained ... as decisions on the recommendations in the white paper will be a matter for government, not Dr Henry."

A spokesman for the Prime Minister revealed too that upon acceptance of his new government post, Henry was made to sign a contract that legally prevents him from sharing government data to any private entities.

In a statement, Henry expressed confidence that he "will be able to discharge both sets of responsibilities effectively," though he did not the addressed the issue raised by members of the Coalition.