Some of Victoria's worst crooks could get massive taxpayer-funded payouts for wrongful convictions in the fallout from the police lawyer-informant scandal.
Premier Daniel Andrews on Thursday admitted a royal commission into the use of the turncoat lawyer who informed on clients during Melbourne's bloody gang war, could see drug dealers handed cash and their sentences overturned.
"No one I think is happy to be even contemplating the notion of having to see people walk free let alone walk free with a compensation cheque," he told reporters.
"I'm making no judgement on their conduct, but as a matter of law if you are wrongly convicted in that strictly legal sense because evidence used to secure your conviction was not appropriately sourced ... then regardless of the crime you've committed you may well be eligible for a compensation payment."
The government is looking interstate for two commissioners to head the $7.5 million inquiry.
The terms of reference will be finalised once they are appointed but the royal commission will examine how many convictions are affected, what changes are needed to make sure it does not happen again, and a framework to process clemency claims and compensation.
Victoria's police chief Graham Ashton is also facing increased scrutiny over what he knew about the use of the lawyer as an informant, whose identity cannot be revealed.
Mr Ashton on Thursday said police integrity has not been damaged by the scandal and that he will liaise with commissioners ahead of the probe.
"When they're appointed I'm keen to talk with that person about the manner in which Vic Pol would respond to the inquiry," he told ABC radio.
"Certainly one of the questions I'll be saying is 'do you want me to excuse myself from any sort of line responsibility?' ... And if the royal commissioner thinks that's appropriate, absolutely I'll do that."
Mr Ashton acknowledged the seriousness of the lawyer's role as an informant between 2005 and 2009, but said the matter is not his top priority.
"It's absolutely not the biggest part of what I need to do over the next 12 months.
"I don't think the integrity of Vic Pol, given these issues occurred when they did long ago, doesn't mean the integrity of Vic Pol today is tarnished.
"People know that today ... our policies around this area are a lot different to what they were 15 years ago."
Mr Ashton said there have already been up to six inquiries into this matter.
Drug lord Tony Mokbel, jailed for decades, is among a number of clients of the unnamed lawyer, identified in documents released on Monday.
He and others could be eligible to challenge their convictions based on confirmation that police used the lawyer to gather evidence.
Victoria's Supreme Court told AAP there have been no appeals lodged since Monday by any criminal on the list revealed in court documents.