Revelations that Labor's Sam Dastyari told a Chinese benefactor his phone was likely being tapped by intelligence agencies makes his position in the Senate "untenable", the Turnbull government says.
Foreign Minister Julie Bishop has accused Senator Dastyari of acting against Australia's national security interests and Attorney-General George Brandis said the revelations raise serious questions about his loyalties.
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Senator Brandis said the revelations are also a test for Opposition Leader Bill Shorten, who brought Senator Dastyari in from the cold by giving him the leadership role of deputy Senate whip earlier this year.
As revealed by Fairfax Media on Wednesday, Senator Dastyari warned wealthy Chinese Communist Party-linked political donor Huang Xiangmo last year that he was likely to be under surveillance.
The face-to-face meeting between the pair in the grounds of Mr Huang's Mosman mansion in Sydney last October came several weeks after Mr Dastyari quit the Labor frontbench over his dealings with Mr Huang.
Before the two spoke, Mr Dastyari gave Mr Huang counter-surveillance advice, saying they should leave their phones inside and go outside to speak.
The meeting also occurred after ASIO briefed senior political figures, including from Labor, that Mr Huang was of interest to the agency over his opaque links to the Chinese government.
Foreign Minister Julie Bishop on Wednesday said Senator Dastyari must publicly reveal "each and every discussion he had with his Chinese benefactor", accusing him of "actively seeking to thwart" a potential intelligence investigation.
"Senator Dastyari was acting against Australia's national interest and against Australia's national security concerns. That would make his position as a senator untenable," she said.
While refusing to publicly confirm whether Mr Huang was under surveillance, Senator Brandis - who has responsibility for domestic intelligence agency ASIO - said the revelations raised serious questions.
"This is a real test for Bill Shorten. This is not the first time that very concerning allegations have been made against Senator Sam Dastyari and his evident subjection to foreign influence.
"And one has to ask the question: why would anyone acting in good faith warn a benefactor to have a conversation consistent with engaging in counter-surveillance activity?
"Why would an innocent person do that? What was he trying to hide?"
Senator Brandis said he will raise the matter in the Senate later on Wednesday.
In a statement, Senator Dastyari said he has never been briefed by any security agency or received any classified information about any matter.
"I've never passed on any protected security information – I've never been in possession of any. And as I've said publicly before, I would always act in accordance with any security advice I was given," he said. "I reject any assertion that I did anything other than put to Mr Huang gossip being spread by journalists."
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