Labor powerbroker Sam Dastyari has been admonished by a senior factional ally and is facing further scrutiny after it was revealed he backed China's position in the South China Sea dispute at an event with a Chinese-Australian political donor who has previously forked out for his legal bills.

In a June press conference for Chinese media, Senator Dastyari pledged to respect China's position in the hostile dispute with other Asian nations and the United States, at odds with the Labor Party's position, The Australian Financial Review reports.

The senator is also reported as saying "the South China Sea is China's own affair", calling on Australia to remain neutral and drop its opposition to China's air defence zone in the region.

Labor frontbencher Tony Burke, a senior figure of Senator Dastyari's own NSW right faction, has now restated the party's "crystal clear" stance on the issue and Coalition minister Josh Frydenberg labelled the reports "very worrying".