The Australian Federal Police has decided it will not pursue an investigation into Energy Minister Angus Taylor and his office, after the Minister used an allegedly forged document in an extraordinary political attack against Sydney Lord Mayor Clover Moore.

Key points: Angus Taylor wrote to Clover Moore, criticising her council for spending millions on international travel

Angus Taylor wrote to Clover Moore, criticising her council for spending millions on international travel Labor referred the matter to New South Wales police for investigation, who then passed the case on to the Australian Federal Police

Labor referred the matter to New South Wales police for investigation, who then passed the case on to the Australian Federal Police The AFP said there was no evidence of Mr Taylor's involvement in any forged document

Mr Taylor wrote a letter to Ms Moore, claiming her arguments criticising the Coalition's climate change policies would be stronger had her own councillors not racked up millions of dollars in overseas travel.

However, the figures Mr Taylor relied on from the council's annual report were wrong.

Labor had asked New South Wales Police to investigate the matter. It was then referred to the AFP for consideration.

The AFP said there was no evidence to indicate the Minister was involved in falsifying information, and it was unlikely further investigation would find any incriminating evidence.

"Following inquiries undertaken and information provided by NSW Police, the AFP has determined it is unlikely further investigation will result in obtaining sufficient evidence to substantiate a Commonwealth offence," an AFP spokesperson said in a statement.

"The AFP assessment of this matter identified there is no evidence to indicate the Minister for Energy and Emissions Reduction was involved in falsifying information.

"The low level of harm and the apology made by the Minister for Energy and Emissions Reduction to the Lord Mayor of Sydney, along with the significant level of resources required to investigate were also factored into the decision not to pursue this matter."

Mr Taylor welcomed the finding.

"The Labor Party has a track record of using police referrals as a political tool," he said.

"The Leader of the Opposition and Shadow Attorney-General's pursuit of this matter is a shameful abuse of their office and a waste of our policing agencies' time."

But Ms Moore said she's "shocked and disappointed" and it's nearly "beyond belief" that the Minister "is still yet to explain the origin of the fraudulent document he used to accuse the city of egregious spending on travel".

"When the NSW Police confirmed that the document was falsified, it was the community's expectation that the truth would surface, and that the Minister would be held accountable," she said.

"I am shocked and disappointed the AFP will not further investigate the matter and shed light on a situation that has further eroded the community's faith in the Federal Government."

Labor leader Anthony Albanese argued the Prime Minister needed to intervene, and demand answers from his minister.

"This document didn't come from the fairies," Mr Albanese said.

"Someone wrote it, Angus Taylor's office know who wrote it, who gave it to them, what the circumstances are.

"It's not unreasonable that any government which had any integrity whatsoever would ask Angus Taylor's office — it didn't need police inquiries, frankly — where did you get the document from?"