Senior ministers are staying tight-lipped on whether political donations from the CFMEU should be banned as Labor faces pressure over the union's alleged links to underworld figures.

The construction division of the Construction, Forestry and Maritime Employees Union is facing allegations that underworld figures and bikie gang members infiltrated major Victorian construction projects.

Labor's national executive will meet as early as Wednesday to discuss banning political donations from the Victorian branch moving forward, as well as requests from state premiers to suspend affiliation between the union and the state parties.

All options for federal intervention are currently being weighed up by Workplace Relations Minister Tony Burke, including deregistering the construction division.

Former Labor leader Bill Shorten, who placed the scandal-plagued Health Services Union's east branch into administration as workplace relations minister in 2012, said he expected the government's next steps to be revealed "in the near future".

"The clear evidence emerging now is that there's a level of penetration in some parts of the construction sector by organised crime which is so far beyond acceptable," the NDIS minister told ABC radio.

"This is certainly an incredibly serious issue and it's a betrayal of taxpayers. It's a betrayal of the vast bulk of people who belong to unions."

The Victorian and South Australian branch of the union have been placed into administration, with SA Premier Peter Malinauskas calling for the construction division to be suspended from his state's branch of the party.

Meanwhile, Victorian Premier Jacinta Allen has cut off donations from the union. Federally, the construction division donated $1 million to the federal party for the last election. 

Asked if federal Labor should follow in Ms Allan's footsteps, both Mr Shorten and fellow frontbencher Stephen Conroy referred the matter to the ALP. 

But Mr Shorten said he supported the Victorian premier's move.

"I think people do want to see clear and unequivocal action now," he said.

Labor accused of turning blind eye to CFMEU

The CFMEU represents employees connected to the construction, manufacturing, timber, textile, clothing and footwear industries.

The reports, published in the Nine Newspapers in recent days, alleged bikies and criminals were acting as union delegates and given highly paid jobs on government-funded projects under the watch of Victorian branch secretary John Setka. 

Mr Setka resigned on Friday, saying he was stepping down in a bid to put an end to the "malicious attacks".

Tasmanian senator Jacqui Lambie has been a long-time critic of the union and its affiliation with Mr Setka. She accused Labor of turning a blind eye to the CFMEU’s behaviour for some time and called for the union's immediate deregistration. 

"It should be deregistered and any political party accepting donations from these bully boys ought to be ashamed," she said. 

CFMEU national secretary Zach Smith said deregistration would be a "disaster for workers" who would "lose their representation overnight".

"This is a dangerous, precarious industry and the last thing you want is workers to be left vulnerable and without representation, without protection in an industry like ours," he told the ABC.

Meanwhile, Master Builders Australia CEO Denita Wawn wants the government to consider new laws to regulate the unions after Labor abolished the Australian Building and Construction Commission, the so-called cop-on-the-beat.

"We're seeking regulators with resourcing to do their jobs," she said. 

"And more laws to govern those who are not acting in the accordance of what is appropriate in our society, to represent the interests of workers and employers.