A NSW Liberal MP has been accused of acting as a double agent during the last federal election and leaking information to Labor to "destroy" a party colleague.

The allegation, raised by former federal MP Russell Matheson in a complaint to Liberal officials on Friday, threatens to destabilise the party and prompt an investigation into state MP and powerbroker Jai Rowell.

Vehemently denies the allegation: Jai Rowell. Credit:Simon Bennett

Mr Rowell, the MP for Wollondilly, vehemently denies the allegations as the fabrications of troublemakers and says he was a strong supporter of Mr Matheson's.

Suspicions that Mr Matheson's campaign to hold the key western Sydney marginal seat of Macarthur was being undermined by leaks emerged early in the federal campaign.