Former prime minister Kevin Rudd has succeeded in his extraordinary bid to reveal Cabinet secrets about his government's failed home insulation program, after the Commonwealth backed down on its gag.

Mr Rudd had caught the royal commission in a legal conundrum that threatened to derail the inquiry.

The Australian government solicitor had taken a black marker to Mr Rudd's statement on behalf of the Commonwealth government, redacting more than half of the 31-page document for Cabinet secrecy reasons.

Mr Rudd was due to give evidence at the inquiry in Brisbane on Wednesday evening, but his lawyer Bret Walker said his client could not give a full explanation of his role unless the Cabinet secrecy provisions were lifted.

Commissioner Ian Hanger QC said he would consider the dilemma overnight, but lawyers for the Commonwealth agreed to lift the gag on Thursday morning, saying their instructions had changed.

"The Commonwealth now supports the public ventilation of redacted portions of Mr Rudd's statement," barrister Tom Howe QC told the inquiry.

In his statement, Mr Rudd said he appointed former Labor senator Mark Arbib to the role of parliamentary secretary to oversee the rollout of the $2.8 billion home insulation program, as part of the government's wider $42 billion stimulus package during the global financial crisis.

Senator Arbib was known as a highly competent, highly effective individual, known for his attention to detail, and with sufficient political standing within the government to perform this challenging role," Mr Rudd said.

"This is why I appointed him to this position."

Mr Rudd said the appointment of Mr Arbib and then-environment minister Mr Garrett as co-ordinators of the scheme was to ensure "multiple eyes could be deployed to identify problems as early as possible".

"I also had great confidence in Minister Garrett and in the additional support structures we had put in place for him and for other ministers responsible for the implementation of their parts of the stimulus strategy," he said.

Mr Rudd said members of the public service designed the insulation program before it was put to Cabinet for approval.

"On the safety dimensions of any government program ... this would normally be part of public service due diligence procedures, before moving the implementation of any given Cabinet decision," he said.

"Cabinet, of which I was the chair, collectively approved the plan put to it by the public service on home insulation ...

"The home insulation program was not recommended by ministers, but by the public service itself."

The hearing continues.