A Beijing-orchestrated plot to bankroll New South Wales Labor candidates in this year's federal election has been foiled by ASIO.

The Chinese foreign interference attempt was first flagged by ASIO boss Mike Burgess on Wednesday, when he warned "many" foreign nations were targeting all levels of government in Australia.

The ABC has now confirmed a business figure in Australia with deep ties to China acted as a "puppeteer" to finance potential federal Labor candidates in NSW who would be sympathetic to Beijing.

The Prime Minister and Opposition Leader have both been briefed on the failed overseas operation. 

Labor leader Anthony Albanese insisted the potential candidates courted by China were not ultimately preselected by his party, and the foreign interference attempt on Labor was unsuccessful. 

"I have spoken to Mr Burgess today and he has reaffirmed that he has not raised concerns about any of my candidates," Mr Albanese said on Friday. 

When he first revealed vague details of the foiled interference plot on Wednesday, Mr Burgess declined to publicly name the country involved, insisting attribution was not his role.

Mr Burgess also insisted the political candidates targeted had no knowledge of the foreign plot. 

"Even if the plan had proceeded, they would not have known who was pulling the strings," he said.

"The puppeteer used the employee as a cut-out. This deliberate deceit and secrecy about the foreign government connection is what took the case into the realm of foreign interference.

During Question Time on Thursday, Defence Minister Peter Dutton accused Labor of being China's preferred party in this year's election. 

"The Chinese Communist Party, the Chinese government, has also made a decision about who they're going to back in the next federal election, Mr Speaker, and that is open and that is obvious, and they have picked this bloke (Mr Albanese) as that candidate," Mr Dutton said.

At no point has it been suggested that Mr Albanese had been aware of the Chinese plot or involved in any wrongdoing.

The Opposition Leader has hit back at Mr Dutton's comments, describing his tactics as "desperate" politics.

"I have had a consistent position over a long period of time but I am not going to sit back and cop the sort of nonsense that is being put forward from a government that sat back while the Port of Darwin was sold to interests of a company directly engaged with, and connected to, the government of the People's Republic of China," he said.

NSW Labor's general secretary Bob Nanva said Mr Burgess had not raised the matter with either himself or the leader of the NSW Parliamentary Labor Party.

"NSW Labor can confirm that no national security agency has ever raised these alleged matters with the parliamentary leadership or the organisational wing of the NSW Branch," he said.

"Labor will always work in the national interest.

"We are concerned about the timing and source of these allegations. National security should never be weaponised in the federal parliament for domestic political purposes."

Despite being accused of politicising national security, Mr Dutton on Friday doubled down on his claim that the Chinese government wanted Labor to win the federal election.

"If you look at the facts in this case, I think they, certainly from what I see, both open-source [information] and other intelligence that I see, it's a statement of the obvious," Mr Dutton told the ABC.

"And there are relationships going back to Sam Dastyari. Bob Carr obviously is very close to Beijing."

The Chinese embassy in Canberra is yet to comment on revelations that it tried to interfere in this year's election, while the Russian embassy is refusing to comment on what it describes as "hearsay" about its meddling in Australian politics. 

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