On the Friday afternoon of the 2009 Australia Day weekend, Federal Environment Department bureaucrat Mary Wiley-Smith and a fellow bureaucrat were told to have the plan ready for costing by the Department of Finance and Regulation on the following Monday.
The revelations came in the first day of hearings in Brisbane at the Royal Commission which was set up in December by the Coalition Government and tasked with uncovering whether the Labor Government had received advice, warnings or recommendations about the program.
It involved rebates being paid to homeowners or installers of roof insulation but four installers died and badly installed insulation caused hundreds of house fires.
Mr Rudd and Mr Garrett have been called to give evidence at the inquiry into the $2.5 billion program. Former senator Mark Arbib, who was involved in coordinating government stimulus spending, is also to be called to give evidence.
Ms Wiley-Smith, an assistant secretary in the resources and energy efficiency division, also confirmed she and her fellow bureaucrat were told to keep the matter confidential and they could not ring industry representatives to seek advice.
However an industry representative who had been in touch with a minister's office was allowed to contact them, she confirmed.
Under questioning from Richard Perry SC, representing two of the families of the deceased, Ms Wiley-Smith acknowledged the specific directive to keep the matter confidential had not occurred before.
Ms Wiley-Smith also acknowledged she had heard talk among the Environment Department's Communications staff and the risk assessment staff by July 2009 about deaths in a New Zealand insulation program. She would have preferred the program was rolled out over five years.
Earlier the inquiry heard legal discussion about whether Federal cabinet documents relating to the scheme should be aired publicly at the inquiry.
The inquiry has been given all cabinet documents relating to the scheme including notebooks and letter between Mr Rudd and Mr Garrett.
Counsel representing the Commonwealth Tom Howe queried whether all the documents in full should be made public.
Former Prime Minister Julia Gillard has also been asked to provide documents to the inquiry.
Commissioner Ian Hanger QC gave the Commonwealth until Thursday to provide an affadavit before he would rule on the request.
Matthew Fuller, 25, Rueben Barnes, 16, Mitchell Sweeney, and Marcus Wilson died while installing insulation as part of the scheme.
Barnes was electrocuted while laying batts in a ceiling near near Rockhampton in Queensland in 2009.
Sweeney also was electrocuted installing insulation in North Queensland in 2010.
Fuller was electrocuted while installing foil insulation in a Brisbane home in 2009.
Wilson collapsed and died from heat stroke after installing insulation in a house in western Sydney in 2009.