AUSTRALIAN Wool Innovation should be scrapped and replaced by a body of skilled people from across the industry, a Liberal Senator says.

Senator Concetta Fierravanti-Wells has also slammed the industry's handling of mulesing, saying it had no choice but to honour the 2010 phase-out.

Tabling a 620-page study-leave report in the Senate last week, Senator Fierravanti-Wells said AWI's problems were "systemic and ingrained".

"Its standing and reliability as an effective organisation has been compromised to the point where it is best for the Australian Government and industry stakeholders to start afresh with the establishment of a broad, skills-based, industry-wide body," she said.

A new body should represent growers, processors, testing and certification bodies, textile, apparel and fashion industries, research and educational bodies and trade and marketing, she said.

Her report has put to bed rumours of a new group of individuals who are ready to lead the industry if the WoolPoll vote is for a zero per cent levy.

Hamilton ultra and superfine wool grower Michael Blake advised the senator.

Mr Blake said he made comments, anonymously, to a local paper regarding the report's recommendation, before tabling.

He claims he said there was a new alternative model for AWI, but that these comments were slightly misinterpreted.

"I was talking about a new structure that's needed, not any specific group of people who want to take over," he said.

But Mr Blake is adamant AWI will soon be restructured.

He said he used his knowledge and contacts to assist the senator because AWI had been backing away from the mulesing deadline, which was damaging markets.

WoolProducers executive director Greg Weller said the report underlined the absolute need for fundamental restructure of AWI.

An AWI spokesman said chairman Wal Merriman had stated emphatically that he would not remove the democratic right of wool growers to determine their own industry leadership.

Agriculture Minister Tony Burke said he would meet Senator Fierravanti-Wells to discuss the report.