Liberal Party backbencher Cory Bernardi is joining Labor's call to ban foreign political donations as pressure on the Prime Minister to act mounts.

"It's wrong for substantial amounts of money from foreign entities in non-democratic governments to flow into [the] Australian body-politic," Senator Bernardi told AM.

The call follows a week of controversy about a $1,600 personal donation to Labor senator Sam Dastayri from a businessman with strong Chinese Government links.

Chinese-language media in Sydney then reported Senator Dastyari making pro-China comments in relation to its aggressive stance in the South China Sea, at odds with Labor policy on the matter.

Within hours, the Attorney-General George Brandis shut down Senator Bernardi's call for the wider donations debate, saying Labor's campaign was designed to distract from the controversy surrounding Senator Dastyari.

"Until Mr Shorten shows that he is a leader and will put the national interest ahead of protecting Senator Dastyari, on whose factional support by the way he relies inside the Labor Party, then we are not going to be having any conversation other than that," he told AM.

Senator Dastyari last night skipped an event he was due to appear at in Sydney hosted by the Australian Chamber of Commerce and Industry.

The ABC understands he was booked in several weeks ago to appear on a panel with Liberal senator Arthur Sinodinos.

Senator Dastyari notified organisers at lunchtime on Monday he would not be in a position to attend and nominated fellow Labor frontbencher Ed Husic as a stand in, who then attended on his behalf.

"Sam Dastyari's proven now very hard to find, the Labor Party need to release him from witness protection," Senator Bernardi said.

In defending Senator Dastyari, Labor has drawn attention to a recent Chinese-linked donation worth more than $500,000 to the Liberal Party's West Australian branch, the home state of the foreign minister Julie Bishop.

"According to Mr Turnbull's standards, the foreign minister is hopelessly compromised by these foreign donations," shadow special minister of state Stephen Conroy told AM.

Need to 'rid polity of external influences': Greens

The Opposition has been calling for foreign donations to be banned since the Dastyari donation scandal was revealed.

Senator Bernardi said he also believes now is the time to act.

"It's timely and it's in the interests of the country to reform political donations," he said.

"Donations should only be made to political parties by those who are registered on the Australian electoral roll, they should be capped by a finite amount and they should only be made by individuals."

The Greens are also urging action with leader Richard Di Natale writing to Prime Minister Malcolm Turnbull on Monday.

The letter calls for an end to donations from foreign entities and corporations as well as strict caps from non-government organisations.

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