EMBATTLED senator Sam Dastyari will resign as Labor's deputy whip and quit high-profile Senate committee positions as revelations about his relationship with China-linked political donors continue to mount.

Labor leader Bill Shorten contacted Senator Dastyari last night and demanded his resignation from those positions.

"I told Senator Dastyari that his mischaracterisation of how he came to make comments contradicting Labor policy made his position untenable," Mr Shorten said.

"I also told him that while I accept his word that he never had, nor disclosed, any classified information, his handling of these matters showed a lack of judgment."

Senator Sam Dastyari
Senator Sam Dastyari

The most recent revelation confirmed Senator Dastyari had strayed from Labor's position on the South China Sea by suggesting the party not become involved in the dispute.

China controversially claims islands in the area, a claim disputed by Australia and the United States, both of which have conducted freedom of navigation exercises in the area.

It comes after the Telegraph revealed Mr Shorten urgently called ASIO's top officials this week to check whether factional heavyweight Sam Dastyari was a legitimate national security concern.

Senior Turnbull government ministers have demanded Mr Dastyari explain his actions or resign after it was revealed he told a billionaire Chinese donor his phone was under surveillance.

The Daily Telegraph understands Mr Shorten contacted ASIO after hearing the allegations and was advised Mr Dastyari did not pose a security risk.

Opposition Leader Bill Shorten
Opposition Leader Bill Shorten

It is unclear whether Mr Shorten spoke to director-­general Duncan Lewis, who is overseas, or acting director-general Wendy Southern. ASIO declined to comment.

In a statement, Mr Shorten said he received "regular confidential briefings from our security agencies".

"I don't discuss the detail of those briefings with anyone, including Senator Dastyari, however, I do not believe the senator is the subject of any national security investigation," he said.

Prime Minister Malcolm Turnbull demanded Mr Dastyari explain the claims he had given surveillance information to Huang Xiangmo, a Chinese property developer.

"Here is an Australian senator who has gone to a meeting with a foreign national with close links to a foreign government and advises that foreign national, Mr Huang, to put their phones inside to avoid the possibility of surveillance," Mr Turnbull said.

"We expect Australian senators to be on the side of Australia, not assisting foreign governments and foreign allegiances."

Mr Dastyari denies he gave any classified information to Mr Huang.

He resigned from Labor's frontbench last year after revelations he had asked Mr Huang to pay for his expenses and echoed Chinese government talking points when speaking to the Chinese media about the South China Sea.

His comments came just one day after Labor announced it would allow the navy to sail through disputed waters, if elected.

Mr Huang immediately pulled a $400,000 donation to Labor and then stood alongside Mr Dastyari at the press conference the following day.



Sam Dastyari's position as a Labor senator is "untenable" after leaked audio suggested he defended China's controversial South China Sea policy in defiance of the ALP stance, Foreign Minister Julie Bishop says.

"The Chinese integrity of its borders is a matter for China," Senator Dastyari said in the audio from a press conference with Chinese reporters in June 2016 and published in various media outlets on Wednesday.

Senator Dastyari had previously said he had only "incorrectly" mumbled an answer to a question he should not have taken.

Ms Bishop called for Senator Dastyari's scalp saying the release of this audio tape is further evidence that his position as a parliamentarian is untenable. "It is time for his lies and his cover-ups to stop," she told reporters in Canberra yesterday.

"Senator Dastyari must reconsider his position as a senator."

Defence Minister Marise Payne joined Ms Bishop in condemning the senator, saying his "recklessness" shows Labor can't be trusted on defence and national security.

"It is clear that Labor cannot be trusted and that they will say anything to Australian media while telling a vastly different story to foreign audiences," she said in a statement.

"This is a test of Bill Shorten's authority." Pressure is mounting on Opposition Leader Mr Shorten to remove Senator Dastyari from Labor's frontbench - again.

"He's a serial offender when it comes to placing himself evidently under the influence of the Chinese government," Attorney-General George Brandis told ABC television's Lateline program.

After a brief spell in the doghouse last year, Senator Dastyari became deputy opposition whip in the upper house in February.

Labor frontbencher Mark Dreyfus said the senator must be given the opportunity to explain himself.

"I'm not going to hang, draw and quarter someone on air ... without hearing what Senator Dastyari might have to say," he told ABC radio.

News Corp Australia

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