A veteran Labor figure concedes Sam Dastyari made a "big mistake" as the opposition senator faces calls to step aside for allowing a Chinese donor to pay a debt for him.
Senator Dastyari has admitted he should have paid the $1670.82 debt himself, rather than allowing a donor to foot the bill after he exceeded his travel allowance.
He insists the payment was properly declared on his pecuniary interest register and he's now donated that amount to charity.
But outspoken Liberal backbencher Cory Bernardi says declaring the payment isn't good enough, suggesting the matter has the "stench of corruption".
He's called on Senator Dastyari to stand aside.
Labor colleague Doug Cameron has also raised concerns about Senator Dastyari's "big mistake".
"We should look at more generally why anyone, why any politician, would have to rely on funding external to the parliament to carry out their job," he told reporters in Canberra.
Senator Bernardi says Senator Dastyari's position as manager of opposition business in the Senate was "entirely untenable" and he should stand aside until he can explain the circumstances surrounding the payment.
He also questioned Senator Dastyari's suitability to remain in parliament, pointing to other instances where Chinese interests had footed bills.
"One of the highest paid officials in the country, the top one per cent of income earners, couldn't find it within his own resources to pay back the $1670.82," Senator Bernardi told parliament.
"The links between Senator Dastyari and the communist party of China are extraordinary."
Senator Cameron later told parliament Senator Dastyari was an "honest and capable" politician, accusing Senator Bernardi of over-stepping.
"There should be a forensic examination of every Liberal politician's election funding in this country, and then we'll see where the Chinese money is going," he said.
"(Senator Dastyari) has exposed their link to the big banks - they don't like it."
Senior Labor figures have jumped to Senator Dastyari's defence, saying he disclosed the payment fully in his register of interests.
"It's not like he was caught doing something," shadow treasurer Chris Bowen told ABC TV.
But deputy Labor leader Tanya Plibersek said politicians needed to be careful.
"The fact that he has agreed to pay the equivalent amount to a charity shows that he doesn't believe that it's appropriate, he believes he made an error of judgement."
