Education secretary Estelle Morris has written to the Education and Skills Select Committee, claiming that her department is exempt from handing over details of discussions between Treasury and Education Department officials.
The refusal has left the inquiry in the dark about the true motives of the Government in suspending the scheme, which ran at least £60m over-budget.
Early ministerial statements blamed the closure on cost over-runs caused by the popularity of the scheme, but the Government quickly changed tack to blame abuse of the system by fraudulent training providers.
MPs suspect that pressure from the Treasury, rather than concerns about fraudsters exploiting security weaknesses in the Capita-designed IT systems, may have been the primary reason for pulling the plug on the scheme.
"Without access to the detailed notes of confidential discussions between Treasury and DfES officials we cannot know how large a part the desire to rein in over-spending played in the demise of the ILA. This is not a satisfactory position to be in," the MPs said in their report last week.
In her letter, Morris said her department had gone beyond the provisions of the Open Government Code of Practice in providing information to the committee. She implied that the disclosure of the Treasury minutes would harm "the frankness and candour" of discussions between officials.