Liberal MP Craig Laundy's retirement 'imminent'

Federal Liberal MP Craig Laundy is expected to announce "imminently" his retirement from the marginal Sydney seat of Reid.

Mr Laundy - a former minister and staunch ally of Malcolm Turnbull - has reportedly told Scott Morrison of his decision to quit.

But the decision has been kept under wraps while the prime minister finds a high-profile replacement to parachute into the seat.

Mr Morrison continues to fend off questions about Mr Laundy's widely-anticipated resignation.

"When we're in a position to make announcements about that matter then we will," he told reporters in Melbourne on Thursday.

However, his attempts to recruit a star candidate have suffered a major setback, after former NSW Police deputy commissioner Nick Kaldas rejected his offer to run.

Mr Kaldas rebuffed the prime minister at a meeting last week, The Australian reports.

Senior Liberal figures believe Reid is likely to be lost to Labor unless Mr Laundy stays on, or a well-known candidate fills the void.

Labor candidate Sam Crosby, the executive director of the party's public policy think tank, has been campaigning in the seat for the past 12 months.

The Liberal Party holds Reid by a margin of 4.7 per cent, with a federal election due in May.