A top-secret Government report has uncovered a decade-long attempt by the Chinese Communist Party to compromise Australia's major political parties.

9NEWS has confirmed the report says the CCP's operations are aimed at all levels of government and designed to gain access and influence over policy making.

Malcolm Turnbull commissioned the joint investigation in August 2016, combining the resources of domestic spy agency, the Australian Security Intelligence Organisation (ASIO), and the department of Prime Minister and Cabinet.

The departmental effort was led by one of the Prime Minister's former advisers, John Garnaut.

Mr Turnbull had seen enough of what the investigation had turned up by May 2017 to order the Attorney General to significantly toughen Australia's laws on espionage and foreign interference.

Efforts to intervene in Australia's politics have become increasingly brazen under President Xi Jinping, according to former advisor to the PM, John Garnaut. Picture: AAP (AAP)

It is those proposed laws – and the commentary around them – that have been a major factor in the recent chill in the relationship between Australia and China.

The Prime Minister referred to the existence of the secret report when he tabled the foreign interference bills in December .

"The findings of the report are necessarily classified," Mr Turnbull said.

"But I can say the reasons for initiating this work were justified and the outcomes have galvanised us to take action.

"I'm introducing legislation to counter the threat of foreign states exerting improper influence over our system of government and our political landscape."

In March, John Garnaut told the powerful US House Armed Services Committee that the Chinese Communist Party worked subtly by offering privileged access, building personal relationships and rewarding those who delivered. Picture: 9NEWS (9NEWS)

Mr Turnbull has not named China as being the country of most concern to Australia but the secret report does.

Mr Garnaut has left the public service and is now running a consultancy firm, JG Global, and in March he appeared before the powerful US House Armed Services Committee . His evidence focused on China and this testimony suggested his work on the report was global in its scope.

"Under the uncompromising leadership of President Xi Jinping, China's activities have become too brazen and aggressive to ignore," Mr Garnaut said.

"A re-evaluation is taking place in half-a-dozen established democracies around the world, including Australia and the United States. Many more are entering the conversation."

He said the Chinese Communist Party worked subtly by offering privileged access, building personal relationships and rewarding those who delivered. He did not refer to his secret report but noted the scope of the Chinse influence operations had appeared in media reports around the world.

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"We know that this is happening in our universities, in business communities, in ethnic Chinese communities, in media and entertainment and in politics and government.”

He said the Communist Party's systems were was so alien to Western eyes that "we have been having trouble seeing them let alone responding”.

"The party has been 'winning without fighting', to borrow some of its terminology," he said.

The existence of the secret report and the involvement of Mr Garnaut as one of its authors sheds light on what motivated the chair of Parliament's intelligence committee to make a dramatic public declaration last week .

Andrew Hastie used the cover of Parliamentary privilege to name a major Chinese Australian political donor, Dr Chau Chak Wing, in connection with a long-running United Nations bribery scandal.

Dr Chau has never been charged with any offence and he vigorously denies all the allegations.

Dr Chau Chak Wing has denied any involvement in the UN bribery scandal. Picture: AAP (AAP)

Mr Hastie said he was moved to speak out because he believed that defamation actions were hampering the reporting.

"Defamation cases can have a chilling effect on our free press," Mr Hastie said.

Dr Chau has two defamation actions afoot and one names Fairfax Media as a respondent for articles written by Mr Garnaut, when he was that company's Asia Pacific Editor.