TAXPAYERS face a $62 million bill to renovate Victoria's Parliament House, which is crumbling and has been declared dangerous.

A confidential report is urging the Baillieu Government to find the cash for a five-year emergency restoration of the heritage-listed building, which has been declared a risk to MPs and staff, the Herald Sun reports.

But the $62 million bill pales against the cost of a radical plan drafted by the Department of Parliamentary Services to build a new Parliament House.

Under this option, a new Parliament would have spanned the rail lines at the base of Spring St and cost almost $7 billion. But the report concedes the proposal was too costly and it has been dismissed.

The 88-page business case, dated December 2011, reveals the 19th-century building fails occupational health and safety standards and is in a serious state of decay with stone walls falling and water leaking through roofs and stairs.

Lower House Speaker Ken Smith said he wanted to fix Parliament's front steps and move all MPs into the main building "as a priority".

"But we're not going to go to the Treasurer and ask for $62 million upfront. We'll ask him to give it to us in dribs and drabs and we'll get the place up to scratch," he said.

The $62 million "extensive restoration" option was preferred and Treasury has been asked to find funds in an already tight state Budget to fund the emergency restoration.

If approved, work would begin on a five-year first phase with total refurbishment taking as long as 20 years. It would include revamping level five of the building with more floor space, an open kitchen, meeting areas, walkways and MPs' offices.

A new gatehouse including a guard house and muster room, would be built to boost security.

MPs' offices, internal fittings, lifts, airconditioning, heating and plumbing would all be upgraded at a cost of $9.5 million next financial year, gradually climbing to $62 million.

The cost of waterproofing Parliament's front steps has been estimated at $4 million over five years, stone restoration at $25 million, fit-out upgrades at $32.3 million and miscellaneous remedial works at $750,000.

And the roof of the Premier's suite would be replaced at a cost not yet known.

The report describes the heritage-listed dwelling as "a unique building of great cultural and historical significance to Australians".

But it fails safety and disability access standards and heritage considerations.

More worryingly, the report says the building is "an immediate risk to the building fabric or a physical risk to the building occupants".

"External stone walls have crumbled away on more than one occasion, falling without warning to the ground," it says.

Labor's scrutiny of government spokesman, Martin Pakula, said the spending - especially the new Parliament option - would annoy Victorians.

"When we said we wanted the Premier to deliver a jobs and infrastructure plan for Victoria, this wasn't what we had in mind," he said.

The proposed $6.8 billion new Parliament was a three-storey palace suspended over the Jolimont railyards.

But the idea was dismissed for now because it would cost more than the Coalition's total infrastructure capital spending program for 2011-12 - and would not address safety and heritage issues at the existing Parliament building.

Read more at the Herald Sun.