Racing officials have welcomed the prime minister's announcement of an independent inquiry into how equine influenza (EI) penetrated Australia.

John Howard has appointed retired High Court judge Ian Callinan to conduct the inquiry which he said would have wide powers to investigate the source of the outbreak which brought the billion dollar racing industry to a halt last week.

NSW and Queensland remain shut down with all horse movement in both states still banned while racing was up and running in other states on Saturday.

Racing NSW chief executive Peter V'Landys was called to the prime minister's office on Sunday afternoon and said he appreciated the swift action by the federal government.

"I had a meeting with the prime minister to discuss matters facing the industry," Mr V'Landys said.

"The inquiry is what we asked for and we need to find out how EI got into Eastern Creek.

"But more importantly I was most appreciative of his commitment to provide further financial assistance to the thousands of people affected.

"There should be an announcement in the next two or three days on the form the financial assistance will take.

"There is no figure on it but the government is going to help.

"The prime minister was very au fait with the EI situation and very compassionate and he showed his appreciation of the racing industry to the Australian economy.

"We are looking along the lines of a horse welfare payment - per day per horse.

"The assistance package will include equestrian horses and any people looking after horses who need help."

The state governments of NSW and Queensland have provided aid in the way of fodder and other essential requirements for those people stranded in various parts of the states due to the standstill on horse movements.

Many were at an equestrian event at Maitland in NSW on the weekend of August 18 and 19 and subsequently moved to other areas, unknowingly transporting the infection.

Last week the federal government provided a $4 million emergency fund to help those with pressing domestic responsibilities.

Federal Agriculture Minister Peter McGauran has spent the weekend in Sydney talking with racing officials including Mr V'Landys and Queensland Racing chairman Bob Bentley.

He said the public, particularly those directly affected by the outbreak, rightly expected that all circumstances surrounding the entry of EI into Australia were being properly investigated and that Australia's quarantine procedures were effective.

"Considering the seriousness of the situation and the impact on the horse industries, I have asked Justice Callinan to review all the evidence and report to me on the likely cause of the incursion and what measures are needed to maintain the integrity of Australia's quarantine system," Mr McGauran said.

"Justice Callinan will undertake a full independent inquiry and have wide-ranging powers under the Quarantine Act 1908, which allows him to subpoena witnesses and hold public hearings."

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