An investigation by the New South Wales Independent Commission Against Corruption (ICAC) into allegations that certain Parliament members and others solicited and failed to disclose political donations from companies, including prohibited donors, is expected to report soon.

Key points: NSWEC has withheld $4.4m of NSW Liberal Party's public funding

NSWEC has withheld $4.4m of NSW Liberal Party's public funding Free Enterprise Foundation allegedly handled major donations

Free Enterprise Foundation allegedly handled major donations Greens report reveals up to $8m were not recorded as donations

But even before its publication, tough action has been taken against the NSW Liberal Party by the NSW Electoral Commission (NSWEC).

In March, the NSWEC withheld around $4.4 million of public funding from the NSW Liberals.

It said the Free Enterprise Foundation (FEF) had been used to channel and disguise donations by major political donors, some of whom were prohibited donors.

Keith Mason QC, who chairs the NSWEC, has spoken about the decision for the first time.

"We've done what we consider to be our duty. We've enforced the rules, we've given our reasons for doing so," he told Four Corners.

"The commission was apprised of information, not just from the published ICAC transcripts and exhibits, but information of our own and we considered it appropriate to act. It would have been inappropriate not to act.

"Just as we have one person, one vote, to ensure equality of access at the ballot paper, it's equally important, perhaps some would say more important, to make sure that representatives in Government respond only to the voting decisions, not to corrupting decisions of undisclosed financial donations.

"So, the system, which is administered by the Electoral Commission, is designed to ensure transparency and accountability, not just as an end in itself, but to enable this equality of access which is of the essence of democracy to function."

In a statement, the FEF denied it had ever broken the law or breached its regulatory requirements.

It said the gifts it received were not political donations and the funds were not subject to the direction of the original donor.

The NSWEC now operates with an enlarged team of investigators and has used the revelations arising from the ICAC hearings to launch its own investigation into incomplete disclosure of political donations.

Up to $8m not recorded as donations: Greens research

Research into political donations over the past five years has been commissioned by the Australian Greens.

The Greens say the research shows that between $7 million and $8 million in donations made and declared as donations by major companies has not been recorded as such by the parties concerned.

"We've now just come into completing a major project comparing the disclosures from the donors with the disclosures from political parties," Greens senator Lee Rhiannon told Four Corners.

"The figures in terms of the discrepancy are higher than we expected. It's coming in at about $7 [million] to $8 million.

"And I find that extraordinary. It really shows that the current system is failing."

Watch Four Corners: Money and Influence on ABC TV at 8:30pm.