The Prime Minister has dubbed attacks on Liberal backbencher Gladys Liu a "smear" campaign with a "grubby undertone".

Key points: Prime Minister Scott Morrison backs Liberal MP Gladys Liu to remain in Parliament

Prime Minister Scott Morrison backs Liberal MP Gladys Liu to remain in Parliament Ms Liu has faced questions about her links to a secretive Chinese influence network

Ms Liu has faced questions about her links to a secretive Chinese influence network Mr Morrison says "smears" on Ms Liu are an insult to all Chinese-Australians

The ABC on Wednesday revealed ASIO had advised then-prime minister Malcolm Turnbull to not attend a meet and greet Ms Liu had arranged in Melbourne in 2018.

The advice was given based on the guest list for the event.

That revelation came hours after Ms Liu confirmed she held membership of an organisation linked to China's foreign interference operations, less than 24 hours after saying she could not recall being a part of it.

Labor's foreign affairs spokeswoman, Penny Wong, called on the Prime Minister to assure the Parliament Ms Liu was "fit and proper" to be an MP.

Mr Morrison has backed Ms Liu to remain in Federal Parliament and said questions about her fitness as an MP are an insult to Chinese-Australians.

"This has a very grubby undertone in terms of the smear that is being placed on Gladys Liu," Mr Morrison said.

"I think people should reflect very carefully in the way they have sought to attack Gladys over this matter and the broader smear that I think is implied in that over more than 1 million [Chinese-Australians]."

Shadow Attorney-General Mark Dreyfus led the attack, demanding Ms Liu explain herself to the Parliament. ( ABC News: Adam Kennedy )

Labor sought to use parliamentary procedures to demand Ms Liu explain her association with organisations linked to the Chinese Communist Party.

But the Opposition failed to gain enough support in the House of Representatives to compel Ms Liu to address the matter.

Attorney-General Christian Porter told Parliament that suggestions Ms Liu was a "traitor" by virtue of her previous links to Chinese associations were disgraceful.

"That is the sole basis that members opposite said [that] she is not a fit and proper person to be in Parliament," Mr Porter said.

"That is outrageous, that is xenophobic. You should all be disgraced about [it]."

After an interview on Sky News, in which Ms Liu said she couldn't recall her membership of associations and made statements on the South China Sea, the Liberal backbencher released a statement clarifying her comments.

The Prime Minister said he was satisfied with the comments Ms Liu had made since the Sky interview.

"Gladys gave a clumsy interview," Mr Morrison said.

"She is a new member of Parliament. If that were the grounds for which people weren't sitting in the Parliament, it would be a pretty empty place."

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 59 seconds 59 s Ms Liu says her name may have been added to records without her knowledge (courtesy Sky News: The Bolt Report)

Labor demands answers from the Prime Minister

Senator Wong and Shadow Attorney-General Mark Dreyfus, in a statement, dismissed Mr Morrison's suggestion it was merely a clumsy interview.

"This goes far beyond whether an interview was clumsy. It goes directly to the national interest," the statement reads.

"In light of these reports, the Prime Minister must urgently demonstrate to the Australian people what steps he took to ensure that Gladys Liu is in fact a fit and proper person to sit in the Australian Parliament.

"It is in the interests of Chinese-Australian communities and our inclusive democracy for these specific concerns to be addressed."

Crossbench Centre Alliance senator Rex Patrick told RN Breakfast Ms Liu must reconsider her position in Parliament after this week's revelations.

He said the Victorian hadn't been "candid" with the public or Parliament.

"She definitely needs to make a a statement with all of the evidence that's emerging," Senator Patrick said.

"She has reached the Sam Dastyari threshold where she must consider her tenure."

PM rejects comparison with Sam Dastyari

Senator Wong has also compared the situation to that of Mr Dastyari, a former Labor senator, who quit Parliament after revelations about his links to China.

Mr Morrison has repeatedly rejected comparisons between Ms Liu and Mr Dastyari.

Attorney-General Christian Porter labelled the attacks against Ms Liu as "xenophobic". ( ABC News: Adam Kennedy )

On Wednesday, he told Question Time "money changed hands" between Mr Dastyari and Chinese donors and said the former Labor politician had been "caught in his own web of corruption".

Speaking today, Mr Morrison said Labor should review its attacks on Ms Liu.

"Gladys is a Chinese-born Australian. Does that make her in cahoots with the Chinese Government? Of course not," the Prime Minister said.

"It is a ridiculous suggestion and I think it is an insult to every single Chinese-Australian in this country.

"We all remember the last New South Wales state election. What did they say, 'Asians will take your jobs'?

"The Labor Party have to take a good, hard look at themselves as to why they are pursuing this matter."