A private investigator who gets paid by councils to have undercover sex inside illegal brothels has been fired after withholding information about a prostitute whom he met on a job.

Over the past four years, Fred Allen* has received tens of thousands of dollars from at least 10 Sydney metropolitan councils in exchange for evidence that is required, in court, to help close underground parlours.

"I'm not as young as I used to be": A middle-aged private investigator hired to gather evidence against illegal brothels. Credit:James Brickwood

But in October the investigator was accused, by Sydney-based consultancy firm Brothel Busters, of having "deliberately omitted" important details from a brief of evidence to "protect" an illegal sex worker, with whom he had become "enchanted", while working covertly inside an underground vice den.

In the lead-up to the 2011 state election, the O'Farrell government vowed to introduce a "new licensing authority" – as an "early priority" – to oversee an industry spiralling out of control. But four years on – and eight weeks out from the next state election – there is still no sign of any remedy to the crisis.