New South Wales Premier Mike Baird has been accused by the Opposition of failing to act over allegations of an election smear campaign that has now forced one of his MPs onto the crossbench.

Key points: East Hills MP Glenn Brooks campaign manager Jim Daniel charged with electoral crimes

East Hills MP Glenn Brooks campaign manager Jim Daniel charged with electoral crimes Mr Brooks stands aside from parliamentary Liberal Party

Mr Brooks stands aside from parliamentary Liberal Party He says allegations came as a surprise

Member for East Hills Glenn Brookes has stood aside from the parliamentary Liberal Party after his campaign manager, Jim Daniel, was charged with electoral crimes in relation to an anonymous smear campaign against Mr Brookes' Labor opponent Cameron Murphy.

Mr Brookes won the seat by a knife's edge 0.8 per cent margin last year, after Mr Murphy's election poster were defaced with stickers falsely branding him a "paedophile lover".

Anonymous pamphlets that were circulated also made similar unsubstantiated and potentially defamatory claims about Mr Murphy.

Mr Brookes has issued a statement this morning, confirming he would move to the crossbench.

"I am shocked and horrified by the allegations made against my former staff member Jim Daniel," Mr Brookes said.

"These allegations come as a surprise to me and I was not aware of the alleged behaviour at the time.

"I do not want these matters to be a distraction to the great work and achievements of the Government."

Anyone found to be involved 'has no future in party': Baird

Mr Baird said Mr Brookes was doing the right thing in moving to the cross-bench while the court case against Daniel ran its course.

But he warned he would not allow anyone who was found to be involved in the alleged smear campaign to remain in the party.

"I can assure you that any member of my party that is involved in this, if that is the case - and it's still to be proven - they have no future in my party and indeed they are out, full stop, end of story," Mr Baird said.

But Labor said Mr Baird had been aware of the smear campaign from the time of the election, and instead of investigating it, he had praised Mr Brookes as a "hero" in a party room meeting after he won the seat.

"Mike Baird hailed him as hero three days after the state election," Opposition Leader Luke Foley said.

"Mike Baird promoted him, gave him a $20,000 pay rise.

"Mr Baird should explain why he stood by Glenn Brookes for so long. I mean the stench surrounding the Liberal campaigning in East Hills has enveloped the entire Parliament and finally today, a year later Mike Baird is forced to act."

Culture of 'spreading filth against Labor': Opposition

Mr Foley said when Labor had previously raised questions about the smear campaign under parliamentary privilege, Mr Baird accused them of trying to "smear" the member for East Hills.

"My call is to get to the bottom of this culture in the NSW Liberals, where operatives in the party think it's permissible to spread filth against their Labor opponents," he said.

"Mr Baird just gives the doe-eyed look.

"He hears no evil, he sees no evil, meanwhile in the background these dirt merchants are peddling this sort of stuff."

Mr Foley likened it to the infamous scandal where former federal Liberal MP Jackie Kelly's husband was caught handing out bogus pamphlets that attempted to link the Labor Party to radical Islam.

Mr Baird defended his handling of the allegations, saying when they were first raised Mr Brookes had assured him he had nothing to do with a smear campaign.

Mr Murphy said he could not comment for legal reasons.