Schapelle Corby's financial backer has described allegations that her late father had links to drug trafficking as the "ultimate betrayal".
It is claimed police were warned Michael Corby was involved in drug transportation to Bali Three Weeks before his daughter was found with more than four kilograms of marijuana at Denpasar airport.
Ron Bakir, who funded Schapelle's legal bid to prove her innocence, told Macquarie News that if the latest allegations were true he had been conned.
"This is something that I've never seen or experienced in my entire life," he said.
The father of convicted drug smuggler Schapelle Corby has been named by a Queensland police informant as having been involved in smuggling marijuana into Bali, just weeks before his daughter was arrested at Denpasar airport.
Corby was convicted in 2005 for smuggling 4.2 kilograms of marijuana in her boogie board bag on a flight to the Balinese city of Denpasar, discovered at Bali's Denpasar airport in October 2004.
Corby, 30, who maintains her innocence, is serving a 20-year sentence in Bali's Kerobokan prison.
Corby's late father Michael Corby snr has long been suspected of being involved in his daughter's efforts to smuggle the drugs into Bali, after his neighbour and long-time friend Tony Lewis was arrested following a raid on his property outside Gladstone.
Police found 5kg of vacuum-packed marijuana and thousands of dollars in cash in the September 2004 raid, raising questions that he and Mr Corby, who died of cancer earlier this year, had supplied the marijuana.
ABC's Lateline says that raid was sparked by information provided to police by informant Kim Moore, who also named a man called Michael as being involved in the drugs trade to Bali.
According to a Queensland Police intelligence report that man, later identified as Michael Corby, was involved in the transportation of drugs to Bali.
"Information is that along (name obscured) a person with the name Michael is also involved with the transport of these drugs," the report says.
"The informant suggests large quantities are being moved to Bali."
Ms Moore, a former heroin addict, made the statement to police just three weeks before Schapelle was arrested.
"Michael Corby is very close to Tony Lewis and he is involved with the making that Tony does with his drugs and the running," she told Lateline.
Both men denied Mr Corby had any involvement in the drugs trade.
But in another twist to the Corby saga, Mr Corby's cousin Allan Trembath said Schapelle's father had a 30-year history of selling marijuana.
The retired farmhand said in the late 1970s Mr Corby became known as the local marijuana dealer in the coastal Queensland town of Mackay.
"Michael used to be in and out of trouble with dope and over the years I can remember some hell of a big blues with his parents," he told Lateline.
"He used to hang around with a bikie group on the Gold Coast. I can remember him and ... his mother having arguments and fights over different periods of time when I was staying at their house."
Mr Trembath also said Mr Corby had tried to recruit him into his drug business, with an $80,000 offer to transport drugs from northern Queensland.
"I was in the Kooyong Hotel having a few beers when Michael walked in. He approached me, and we went and sat down and he said to me, basically straight out, 'Do you want $80,000'. I said 'What do I have to do, go and kill somebody for it'. And he said 'No, no.' He said 'You take a boat up to Cedar Bay and pick up a lot of marijuana and bring it back down to Mackay and you'll get $80,000 for it'," he said.
"Well at the time I thought $80,000, I could do with it, but if I got caught, ten years in jail at $8,000 a year, when you've got three little kids, it just didn't sum up. So I refused."
Mr Trembath said he felt sorry for Schapelle Corby because "she would have been around drugs all her life".
"I don't think Schapelle would have known any different," he said.