The former state MP Richard Torbay disclosed information to the NSW Nationals that the party has referred to corruption authorities after learning Labor was preparing to leak it to help Tony Windsor defeat him in the federal election.
It is understood Mr Torbay contacted the state director of the NSW Nationals, Ben Franklin, to request an urgent meeting after learning about Labor's plans.
During the meeting Mr Torbay, who was the independent state MP for Northern Tablelands, outlined the allegations, which are understood to relate to Labor funding Mr Torbay's past election campaigns.
Mr Torbay is believed to have made the disclosure as a ''heads up'' to the Nationals, who had selected him to run for them against Mr Windsor in New England in September.
But Mr Franklin regarded them as serious enough to demand Mr Torbay resign as the Nationals candidate for New England and from the party.
The NSW Nationals referred the information to the Independent Commission Against Corruption last week before Mr Torbay announced his shock resignation from State Parliament.
Mr Franklin has refused to disclose the nature of the information, based on legal advice.