A bitter dispute has erupted between the ICAC Commissioner and the watchdog's Inspector after the latter issued a scathing report on its investigation into crown prosecutor Margaret Cunneen.

The report, which labelled the investigation the lowest point in the organisation's history, has prompted calls for Commissioner Megan Latham to reconsider her position.

Inspector David Levine's report found it was "unreasonable" for the ICAC to conduct "Operation Hale" - an investigation into whether Ms Cunneen encouraged her son's girlfriend to fake chest pains to avoid a breath test after a crash.

Mr Levine said the conduct of the ICAC during several parts of the investigation constituted "unjust, oppressive maladministration" and he found the watchdog had illegally seized mobile phones from Ms Cunneen's home.

"Operation Hale from my point of view as Inspector, should be seen ... as the low point in the history of an entity whose functions, properly exercised, constitute an essential safeguard to the integrity of the governance of this state," Mr Levine's report said.

But Ms Latham has hit back, issuing a statement that accused Mr Levine of failing to meet his legal obligation to provide procedural fairness to the Commission.

Ms Cunneen's close friend Jeffrey Phillips SC said the report should have serious ramifications for the ICAC and its Commissioner.

"I would have thought the [NSW] Government and Premier [Mike] Baird now have to consider whether this organisation has gone so far outside its orbit to be almost considered a rogue organisation," he said.

"Megan Latham has to consider her position very carefully and if there are calls for her resignation she should heed them."

Mr Phillips suggested the consequences were so serious the Government should consider rebuilding the ICAC from scratch.

"Maybe just throw this one out and start again and get a new one," he said.

"Anybody who has been part of this unfortunately has been tainted by the whole process and maybe they should start again and get a new body, new leadership."

Ms Latham said receiving a copy of the report via email at 10:42am on Friday was the first notice the ICAC received of the timing or contents of the report.

"Apart from unconfirmed media reports," her statement said.

Commissioner Megan Latham has accused Mr Levine of failing to meet his legal obligation to provide procedural fairness. ( AAP: Ben Rushton, file photo )

"A request from the Commissioner to Mr Levine for procedural fairness was ignored."

Ms Latham's response also listed a number of legal and factual accuracies that she said were contained in Mr Levine's report.

The former ICAC commissioner Anthony Whealy QC said he agreed with the report's key finding that the investigation against Ms Cunneen should not have been pursued.

However, he said there were elements of the report that he found concerning.

"The report I think does reveal a very disturbing, indeed almost poisonous relationship between ICAC and the Inspector. I think that's very unfortunate," he said.

"You'll see there's a great deal of acrimony on both sides.

"I have to say that some of the inspector's language is so vehement that it tends to take away from the objectivity of the report.

"The credibility of the report is undermined by the language the Inspector uses and by the fact that he does make findings against the Commission and Megan Latham , which it appears he has not given them a chance to give a response to.

"So to that extent it could be said to be a flawed report."