NSW Labor to freeze $100,000 in potentially 'tainted' donations in corruption probe

The NSW Labor leader has moved to quarantine potentially "tainted" donations at the centre of an investigation into his party by the state's corruption watchdog.

The NSW Independent Commission Against Corruption is reportedly investigating $100,000 of donations received by the Labor Party at a 2015 fundraising dinner.

NSW Labor leader Michael Daley.Credit: Nick Moir

Those donations were at the centre of an ICAC raid on Labor's NSW head office in December 2018, according to the ABC.

NSW Opposition Leader Michael Daley on Monday said he had directed his party's head office to quarantine $100,000 and send it to the NSW Electoral Commission.

"I've spoken to the secretary of the Labor party today and I've issued her a very simple direction: work with the electoral commission and send them $100,000 to quarantine," Mr Daley told reporters on Monday.

"I don't know if there's any tainted money in those donations but if there is I don't want a bar of it. We won't be using any of it in the campaign."

The ICAC is reportedly investigating 20 donations made to the party at a Chinese Friends of Labor dinner ahead of the 2015 state election, and whether they may have been given by so-called "straw donors".

It is illegal under NSW electoral law for people to put names to donations from other people or parties.

NSW Premier Gladys Berejiklian seized on the revelations, which she described as "very concerning".

"Unfortunately many people must be shaking their heads thinking 'nothing much has changed in the Labor Party'," Ms Berejiklian told reporters.

NSW Premier Gladys Berejiklian .Credit: Anna Kucera

Mr Daley said the $100,000 would be held by the Electoral Commission until the ICAC investigation had concluded.

He said he had no prior knowledge of the information contained in the ABC report, and first learned of the matter after the ICAC raid on the head office.

"In my 23 years in public life I have always acted with integrity. In my view any public official elected or otherwise who does not, deserves the full weight of the law to be applied to them," Mr Daley said in a statement.

AAP