Allegations a senior New South Wales planning official used secret information to buy a property within a proposed higher-density development zone on Sydney's north shore will be referred to the state's corruption watchdog.
Shadow attorney-general Alister Henskens used parliamentary privilege on Thursday night to accuse the unnamed bureaucrat of corrupt conduct based on information from a whistleblower.
"A public official should never use confidential information given to them as a public official for their own personal gain," Mr Henskens told the lower house.
The Liberal MP said the public servant purchased a property within one of the government's planned Transport Oriented Development (TOD) Zones before the policy was made public in December.
The TOD Program would rezone land near dozens of train stations to allow greater housing density.
Mr Henskens said the official purchased the property about the time the Minns government signed a national agreement in August to increase housing targets.
He said the person paid "well above" the median suburb price and that there was a "strong circumstantial case" the property's purchase was motivated by inside information.
The Wahroonga MP further alleged that shortly after the official moved to the neighbourhood, the person communicated to neighbours about selling their properties collectively to a developer.
Mr Henskens told parliament the individual promised a "significant uplift" in the value of properties because of the likely rezoning.
"What is particularly concerning is that the public official in question … has sought to draw their neighbours into their web of corruption to become part of a criminal conspiracy to trade on inside information," he said.
Mr Henskens claimed the person tended to "coerce" neighbours "using the person's senior position in the department as well as the implied threat of being dominated by an overdevelopment of the neighbourhood if they did not join the syndicate".
On the north shore, land within 1,200 metres of Hornsby and Crows Nest stations has been earmarked for high and mid-rise buildings.
Apartment complexes of up to six storeys would be permitted within 400m of Gordon, Killara, Lindfield, and Roseville stations.
Mr Henskens withheld the names, suburbs and addresses relevant to the allegations "to protect the identity" of his confidential informant.
The MP said he had documents confirming the whistleblower's claims.
The NSW government said it would refer Mr Hensken's statement to the Independent Commission Against Corruption (ICAC).
Planning minister Paul Scully said there was "absolutely no place" for the kind of actions alleged.
"We urge the member to make a similar referral, and provide ICAC with whatever information he has to allow for a comprehensive investigation," Mr Scully said.
On Friday, Mr Henskens told the ABC he believed an ICAC investigation was not appropriate as it would take too long.
"ICAC takes years to deal with issues. This planning policy is going to come in force in the next two months," he said.
"What we need is a short, sharp, judicial inquiry with the powers of a Royal Commission to restore integrity in the process."
The new planning controls allowing greater density within 400m of selected train stations will come into effect in April.
The larger re-zonings are due to be completed by November, with development applications expected from the middle of the year.