One of Australia's biggest political donors, who rubbed shoulders with serving and former prime ministers, has been accused of engaging in clandestine activities to "advance the interests of the People's Republic of China".

The allegations involving Chau Chak Wing, an Australian citizen who has also donated $45 million to Australian universities, are detailed in a defamation case in the Federal Court.

Property billionaire and political donor Chau Chak Wing. Credit:Sahlan Hayes

Mr Chau launched the defamation action against Fairfax Media and ABC's Four Corners after a series of stories that showed the Chinese-born property billionaire was a key member of Chinese propaganda organisations in Australia, and that ASIO had warned political parties about their associations with him.

Now, barristers for investigative reporter Nick McKenzie, Fairfax Media and the ABC have filed documents in the Federal Court alleging they had "reasonable grounds to suspect" that Mr Chau "betrayed his country [Australia], in order to serve the interests of a foreign power, China, and the Chinese Communist Party by engaging in espionage on their behalf".