The NSW Labor party is in crisis, with its general secretary Kaila Murnain suspended on Wednesday night after sensational evidence about an alleged $100,000 donation from Chinese property developer Huang Xiangmo.

This followed state ALP leader Jodi McKay declaring she no longer had confidence in Murnain’s judgment and calling a meeting of party officials to have her suspended.

Earlier Murnain told the NSW Independent Commission Against Corruption she learned Huang was behind the donation, made in 2015, when told by then state Labor parliamentarian Ernest Wong in September 2016 at a meeting behind the NSW parliament.

She contacted then Labor senator Sam Dastyari who advised her to go to the party’s lawyer.

She immediately met with Ian Robertson, partner at Holding Redlich, who, she alleged, advised her to remain silent about the matter.

Under the NSW law donations from property developers are illegal.

Read more: Australians think our politicians are corrupt, but where is the evidence?

Murnain was vague about when she first learned about the 2015 donation saying, “My recollection of that was I found out there was a large sum of money that had come into the office that week”. She also said, “The truth is I actually don’t remember at what stage I became aware there was a large amount of money.”

In Labor records, the money appears in the form of donations of $5000 from 20 people.

In evidence earlier in the week ICAC heard that the cash was allegedly presented in an Aldi bag.

In her statement McKay said she was “taking steps to clean up the mess at ALP head office.

"I am appalled by the evidence of the past three days,” McKay said.

Huang in recent times has had his permanent residency revoked and been barred from re-entering Australia on security grounds. Reportedly ASIO found he was “amenable to conducting acts of foreign interference” He responded by saying political parties should return his donations.

Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.