Top New South Wales prosecutor Margaret Cunneen has won a court bid to stop an investigation by the state's corruption watchdog into claims she perverted the course of justice.

In a ruling that could have broad implications for future corruption investigations in the state, the NSW Court of Appeal ruled the Independent Commission Against Corruption (ICAC) had no power to investigate the claims.

ICAC announced it would seek leave to appeal to the High Court, releasing a statement saying the ruling "fundamentally affects the scope of the commission's powers to conduct investigations into corrupt conduct".

Ms Cunneen has denied allegations she told her son Stephen Wyllie's girlfriend, Sophia Tilley, to pretend to have chest pains to avoid a blood-alcohol test after a car crash.

Her legal team argued that ICAC had stepped outside its jurisdiction and that the allegations related to her private life, not her public role as a prosecutor.

Ms Cunneen lost an initial Supreme Court bid to overturn the inquiry last month, but her legal team immediately lodged another appeal.

Two members of a three-judge panel today upheld the appeal.

A judgement summary published by the court said the majority of the panel found the allegations did not fall within the meaning of "corrupt conduct" under section eight of the Independent Commission Against Corruption Act.

"The majority held conduct could only "adversely" affect an official function if it had induced a public official to act improperly," the summary said.

"The alleged conduct could constitute an attempt to pervert the course of justice as it was intended to dissuade a police officer from investigating the commission of an offence.

"Nevertheless, the alleged conduct could not be said to cause the police officer to act otherwise than honestly, impartially and properly."

ICAC said it was "critical to the exercise of the Commission's powers generally that the construction of section 8 of the ICAC Act is settled".