A former Liberal Party leader and former Liberal prime minister have told their currently-serving colleagues to stay out of ANU’s business.

Treasurer Joe Hockey and Education Minister Christopher Pyne are accused of attempting to "bully and coerce" the Australian National University over its decision to dump investments in fossil fuel companies it deemed “unethical”.

ANU has divested itself of seven stocks in mining and energy companies, representing about 5 per cent of its total holdings or about $16 million worth of shares.

“To suggest that companies like Santos and Iluka, which are both excellent companies, are somehow not ethical investments is a bizarre decision,” Federal Education Minister Chris Pyne said earlier this week.

Treasurer Joe Hockey recently claimed the university was “removed from reality” for cutting its stake in companies he says drive the Australian economy and create jobs.

Prime Minister Tony Abbott accused the ANU of "unnecessary posturing", while Environment Minister Greg Hunt and Assistant Infrastructure Minister Jamie Briggs have spoken against the uni too.

Now, former Liberal Party leader John Hewson has come out in support of the university’s decision.

“The big story here is what got the politicians so stirred up? Was it the Minerals Council? It virtually owned the previous government and appears to have large influence over this one,” Mr Hewson is quoted as saying by Fairfax Media.

“I'm surprised the superannuation industry isn't up in arms about government trying to tell institutions how they should invest. What if the big super funds were told they should be investing 25 per cent of their money into infrastructure, 30 per cent into government projects?”

Fifty prominent Australians and ethical investors have taken out a full page ad in the Canberra Times for an open letter supporting the ANU this week, with former Liberal prime minister Malcolm Fraser and businessman Graeme Wood among those putting their names to the statement.

“We cannot understand why a government that is committed to deregulating the university sector would question the ability of a university to make investment decisions,” the letter says.

“It is every investor's right to make their own investment decisions without bullying from vested interests and government ministers. It is ANU's obligation to invest responsibly, which includes thinking about their environmental social standards, how they impacts on financial returns and how they reflect on the character of the institution.”

ANU is the first Australian university to join a global fossil fuel divest movement, although it retains shares in BHP Billiton and Rio Tinto.

Many are waiting to see if any other local universities will take up the challenge to stand against companies some believe will damage the future of humanity.