NSW Labor general secretary Kaila Murnain is facing suspension from the party, with Opposition Leader Jodi McKay saying she no longer has confidence in her judgment.

Key points: ALP officials are meeting tonight to suspend Ms Murnain

ALP officials are meeting tonight to suspend Ms Murnain Ms Murnain earlier told ICAC she does not remember an Aldi bag of cash but knew a large sum of money was delivered to Labor headquarters

Ms Murnain earlier told ICAC she does not remember an Aldi bag of cash but knew a large sum of money was delivered to Labor headquarters Ms Murnain said Labor Party lawyer Ian Robertson told her to keep quiet and not record anything in her diary

The move comes after Ms Murnain told the Independent Commission Against Corruption (ICAC) that Labor's lawyer advised her to keep quiet about an alleged illegal donation from a Chinese property developer.

The ICAC is investigating whether NSW Labor received an illegal $100,000 cash donation disguised as smaller donations at a Chinese Friends of Labor dinner in 2015.

Ms McKay issued a statement saying she was "appalled" by the evidence this week.

"I have therefore asked the party officers to convene a meeting tonight to suspend Kaila Murnain as general secretary, as I no longer have confidence in her judgement," she said.

"Pat Garcia will act in the role of general secretary".

Ms Murnain told the inquiry that former Labor MP Ernest Wong contacted her in a distressed state in 2016 to tell her billionaire Huang Xiangmo had made a large donation to the party.

This would be illegal as property developers are prohibited from making political donations in NSW.

Ms Murnain told the inquiry she was very upset and rang former Labor senator Sam Dastyari who advised her to contact Labor Party lawyer, Ian Robertson.

Ian Robertson tried to cover up an illegal donation, the ICAC heard. ( AAP: Joel Carrett )

She said Mr Robertson told her to keep quiet on the donation issue.

"He said 'there's no need to do anything from here'," Ms Murnain said.

"[He said] don't put this in your diary, forget the conversation with Ernest, I won't be billing you for this either."

Earlier today Ms Murnain told the inquiry she could not recall seeing a bag full of cash at Labor Party headquarters in Sydney or going to the fundraiser dinner in 2015.

She contradicted evidence given by her colleague, Kenrick Cheah, who said that Ms Murnain knew that an Aldi plastic bag full of cash had been delivered to headquarters two weeks before the state election.

Yesterday Mr Cheah said he was told by then-general secretary Jamie Clements to count the cash and then decided to take it home as the office did not have a safe.

Kenrick Cheah is expected to return to the witness box. ( AAP: Joel Carrett )

But Ms Murnain said headquarters did have a safe, and she could not recall seeing that bag of money nor the fact that Mr Cheah was counting it.

She also said she could not remember Mr Cheah taking the money home with him.

"I found out there was a large sum of money that had come in that week … but I can't remember who told me," Ms Murnain said.

'I don't remember people with the Aldi bag. I honesty don't remember that."

Chief Commissioner Peter Hall QC said Mr Cheah should be put on notice to return to the witness box tomorrow morning.



Bosses made donation under employee's name, ICAC told

The inquiry also heard from a witness who said his property developer bosses made a "fake" donation to NSW Labor under his name.

Former project manager at Wu International, Steve Tong, said he was shocked and angry when he received a tax invoice for a $5,000 donation to NSW Labor.

Mr Tong said he had never in his life made a donation to any political party and had no interest in politics.

He also said he did not attend a Chinese Friends of Labor Fundraising dinner at Eight Restaurant in Haymarket.

Giving evidence through an interpreter, he said when he confronted his bosses, Alex Wu and Leo Liau, they admitted using his name to make a "fake" donation, but offered to get him legal advice if he ever got into trouble.

He said he later lied to the Electoral Commission about the donation because he feared he would lose his job.

"I was told that anything you do for the company, you just do it [and] if anything happens they will deal with it," he said.