The Australian Federal Police has dropped its investigation into controversial union leader John Setka over allegations he criminally threatened crossbench senators in a bid to sway their vote on the government's union-busting legislation.

Centre Alliance senators Rex Patrick and Stirling Griff and Tasmanian senator Jacqui Lambie last month accused Mr Setka of intimidation over the Construction, Forestry, Maritime, Mining and Energy Union secretary's expletive-ridden spray, warning they would "wear the consequences" if they voted for the bill.

The AFP has dropped an investigation into John Setka. Credit:AAP

The Sydney Morning Herald and The Age have confirmed the AFP did not proceed with its investigation of Mr Setka, who quit the Labor party this week, after concluding there was insufficient evidence of illegal conduct.

A spokesman for the Australian Federal Police said in a statement the matter had been "assessed in accordance with standard AFP protocols" and that "during this process, the AFP was unable to obtain sufficient evidence to warrant an investigation".