Bill Shorten has put Sam?Dastyari?on notice following revelations the Labor senator told a Chinese benefactor his phone was likely being tapped by intelligence agencies, but the Turnbull government says he has undermined national security and his position is "untenable".
The Opposition Leader has also been forced to deny he shared any confidential security information with Senator Dastyari as the latest twist in the Huang?Xiangmo affair put the spotlight back on the threat of foreign interference in Australia's political system.
Prime Minister Malcolm Turnbull questioned Senator Dastyari's?loyalty to Australia after Fairfax Media broke the story on Wednesday, calling on Mr Shorten to dump him from his role in Labor's Senate leadership team and consider removing him from parliament altogether.
But Labor sought to turn the tables on the government by highlighting recent reporting that Mr Turnbull dined with a Chinese businessman in Queensland just days after one of the executive's companies declared a $40,000 donation to the Liberal National Party ahead of the state election.
Senator?Dastyari?issued his surveillance warning to Mr?Huang, a?wealthy Chinese Communist Party-linked political donor, during a meeting in October last year.
Their?meeting in the grounds of Mr?Huang's?Sydney mansion came two weeks after Senator?Dastyari?quit the Labor frontbench over his financial dealings with Mr?Huang. Before they?spoke, Senator?Dastyari?said they should leave their phones inside and go outside to speak.?
The meeting?also occurred after domestic intelligence agency 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.
Security commentator?Peter Jennings, from the?Australian Strategic Policy Institute, said: "That's about as serious as it gets. This has to be investigated in a very public way."
Mr Shorten?said while he?receives regular confidential briefings from security agencies in his role as a major party leader, he denied sharing any of that information.
"I have made it clear to Senator?Dastyari?that this is not the first time his judgement has been called into question,?but I certainly expect it to be the last."
Mr Turnbull said Senator Dastyari's conduct was a serious national security issue.
"This goes well beyond his previous appalling conduct where he had?Huang Xiangmo?pay some of his personal debts," Mr Turnbull said.?"Whose side is Sam on? Not Australia's it would seem."
Senator Dastyari?hit back, saying:?"I expect Turnbull and the Liberals to smear me?but for he and his colleagues to suggest that I am not a true or loyal Australian is incredibly hurtful – and hurtful to all overseas-born Australians. I might've been born overseas?but I'm as Australian as he is."?
Foreign Minister Julie Bishop accused?Senator?Dastyari?of "actively seeking to thwart" a potential?intelligence investigation, and?Attorney-General George Brandis?said his position was untenable.
"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.
Senator Dastyari said?he has?never been briefed by any security agency nor 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."