CANBERRA - Anger towards Qantas has on Monday shifted onto the federal government, with Opposition and councils attacked Prime Minister Julia Gillard on her handling of the Qantas dispute.

Australian national flag carrier Qantas on Saturday made a sudden announcement to ground its entire flights including domestic and international flights, and locking out its staff due to pay and job security quarrel.

Stranded Qantas passengers wait in front of Qantas check-in counters as they seek alternative travel arrangements at Singapore's Changi Airport Oct 30, 2011. [Photo/Agencies]

Federal government on Saturday asked Fair Work Australia (FWA) to solve the dispute, resulting FWA early Monday announced to terminate all industrial action between Qantas and three unions, paving the way for the airline to return to the skies on Monday afternoon.

The decision caused a political brawl as Opposition Leader Tony Abbott accused Gillard of falling asleep at the wheel and taking too long to act on the dispute.

He accused Gillard of a failure of leadership, insisting she should have used her legislative powers to order unions back to work rather than leaving the issue at the discretion of FWA.

"The government has the powers in the existing act to resolve this dispute," he told reporters in Canberra. "The Prime Minister should use them, and she should get the planes back in the skies safely as soon as possible."

Qantas Chief Alan Joyce joined the war, saying that the airline had warned the government 10 days ago the dispute was approaching a critical point, while the Victoria Tourism Industry Council ( VTIC) also said the industrial umpire and the federal government should have stepped in sooner.

"Tourism has no doubt been damaged by this dispute, both domestically and internationally," VTIC chairman Jeremy Johnson said in a statement. "Our reputation as a tourist destination has also suffered."

Johnson said the dispute, if allowed to continue, would have severely damaged Victoria's 16.3 billion US dollars-a-year tourism industry, which is already plagued by uncertainty as a result of stoppages by Customs staff and the high Australian dollar.

However, Assistant Treasurer Bill Shorten, who was involved in the FWA hearing, rejected Abbott's criticism, describing the carrier's actions as over the top.

"The government doesn't want to play the blame game, but wants to see the dispute between Qantas and the unions resolved," Shorten told reporters in Melbourne.

Gillard also took a swipe at Qantas airline management, saying the grounding of its entire fleet was "an extreme approach".

"They could have gone to the industrial umpire and sought assistance with arbitrating the dispute, working together with the industrial umpire to get it resolved," she told reporters in Canberra. "Instead they took the action, with very little notice to anyone, of grounding the planes and stranding passengers around Australia and the world."

The dispute has led to Qantas grounding 108 planes, which has affected almost 70,000 passengers in 22 airports around the world, as well as costing the national economy of more than $267 million a day.