“Mr [Morris Iemma]’s vagaries about reform by the end of the year are an attempt to ensure that Labor’s fundraising for theSeptember local government elections isn’t derailed,” he said.

Mr O'[Farrell] said while urgent action was needed to clean up the “web of corruption” within Wollongong City Council, any move taken by the Government should not penalise any of Wollongong’s independent councillors, who have been trying to blow the whistle on corruption issues.

“If the state Government sacked Wollongong Council, Morris Iemma must ensure the administrator is independent of the ALP and not associated with any of the figures named at the corruption inquiry,” Mr O’Farrell said.

THE NSW Coalition will use the Wollongong sex and bribery scandal to push for immediate and wide-ranging campaign funding reform.

As parliament resumes for the year this week, state Opposition Leader Barry O’Farrell will introduce a bill to limit to $5000 the amount any individual or organisation can contribute to a political party in any given year.

Under Mr O’Farrell’s reforms, during election campaigns political parties will be limited to spending $30,000 per seat, plus an extra $1.5million overall if they are contesting all seats — a limit that would have slashed Labor’s war chest at the state election, estimated to have been about $15million, by two-thirds.

In addition, on the model of the legislation in New Zealand and Britain, the bill will place strict limits on the amount that third parties can spend during election campaigns.

Such a rule would have stymied the campaign on industrial issues run by Unions NSW during the state election.

The scandal engulfing Wollongong City Council has revealed a network of allegedly corrupt relationships between Labor councillors and developers willing to pay for development approvals and other favours.

Some of the developers named by the corruption watchdog, including Glen Tabak, have donated to the campaign funds of influential Labor politicians in the Illawarra, including Tourism Minister Matt Brown.

The revelations forced the Premier to call on Friday for a review of the laws governing political donations Property developers donated about $2million to state Labor coffers in the run-up to the March 2007 state election.

Mr O’Farrell said yesterday it was not good enough for Premier Morris Iemma to promise reform of campaign funding without providing any details or a timeline.

“Mr Iemma’s vagaries about reform by the end of the year are an attempt to ensure that Labor’s fundraising for the September local government elections isn’t derailed,” he said.

The issue of political donations is currently under investigation by a parliamentary committee, but the Coalition has dismissed thecommittee’s chair, Christian Democrat MP Fred Nile, as a Labor pawn.

But a spokeswoman for the Premier said attempts to introduce spending caps had failed in the past. “We will have a look at the detail of Mr O’Farrell’s proposal, but this is not something that should be done shooting from the hip … International and domestic experience shows that limits on spending are simply not enforceable,” the spokeswoman said.

As the Wollongong scandal threatens the upper echelons of the NSW ALP, Mr Iemma said he stood ready to take “swift action” against Wollongong City Council at the conclusion of the corruption inquiry.

The council is scheduled to hold an extraordinary meeting tonight at which the future of the council may be debated, with independents expected to call for fresh elections.

“In relation to the council, I’ve got to say my gut reaction would be to sack it. The advice that we’ve got is that can only happen after an inquiry,” Mr Iemma said yesterday.

But Mr O’Farrell said while urgent action was needed to clean up the “web of corruption” within Wollongong City Council, any move taken by the Government should not penalise any of Wollongong’s independent councillors, who have been trying to blow the whistle on corruption issues.

“If the state Government sacked Wollongong Council, Morris Iemma must ensure the administrator is independent of the ALP and not associated with any of the figures named at the corruption inquiry,” Mr O’Farrell said.

So far, four of the six current Labor councillors have been linked to the corruption inquiry.

The ICAC hearing continues this week.