ICAC claims another NSW govt scalp

A former top-ranking RAAF officer turned Liberal politician is the NSW corruption watchdog's latest scalp, dealing yet another blow to the Baird government.

Newcastle MP Tim Owen announced on Monday he was quitting politics in light of allegations aired against him at the Independent Commission Against Corruption (ICAC) hearings in Sydney.

While he claimed he had "no knowledge" of any funding irregularities in his 2011 election campaign, he conceded it was "highly likely" that prohibited donors contributed to his campaign.

In a short press conference in Newcastle, he said he wouldn't contest next year's election because of recurring health issues and the ICAC's revelations.

Mr Owen is the seventh state Liberal MP to be sidelined because of the ICAC probes, with Barry O'Farrell resigning as premier and a number of MPs withdrawing from the party and joining the crossbenches.

Mr O'Farrell's replacement Mike Baird, who has vowed to clean up politics in the state, was tight-lipped on Monday, electing to speak through a spokesman.

"The premier spoke to Mr Owen over the weekend and was informed of his decision," the spokesman said, adding that Mr Baird had no further comments.

Mr Baird may be saving his comments for later in the week, when the ICAC hears evidence from sidelined Liberal MPs Chris Spence and Darren Webber and next week, when former energy minister Chris Hartcher appears before the inquiry.

Before entering parliament in 2011, Mr Owen had a distinguished career in the Royal Australian Air Force.

He was the deputy commander of the Australian forces in Afghanistan and Iraq and was made a Member of the Order of Australia in the military division.

Mr Owen said he was "shocked and dismayed" by the ICAC revelations.

"What we need more than ever now is a leader with integrity, and I know we have that in spades in our premier Mike Baird," he told reporters, without taking any questions.