Two NSW MPs resign after admitting accepting illegal donations

Two NSW MPs have resigned from parliament after admitting receiving illegal donations from developers.

Newcastle MP Tim Owen today admitted to lying to the Independent Commission Against Corruption (ICAC) about what he did with $10,000 in cash he received from a property developer.

Charlestown MP Andrew Cornwell told the corruption watchdog last week he had received a bribe from another property developer.

Just before the start of Question Time, the speaker of the NSW lower house Shelley Hancock told parliament she had received letters of resignation from the two men and that their seats were now vacant.

"The people of the Hunter and the people of NSW have been betrayed," Mr Baird told reporters in Sydney before the resignations.

Both men had earlier stood aside from the Liberal Party. At that time, they said they would quit politics at the March election, but today indicated they would resign from parliament immediately.

Greens MP Jamie Parker had planned to introduce a motion to throw Dr Cornwell out of parliament later today.

Mr Baird says by-elections will be held in Charlestown and Newcastle despite the NSW election being only seven months away.

"Everyone in NSW, everyone in the electorates has the right to feel appalled, angered and betrayed," he told parliament.

Opposition Leader John Robertson urged Mr Baird to introduce full public funding of elections to remove the "corrosive influence of donations once and for all".

Mr Baird said the government had already taken action on the issue, launching reviews into donation rules and the governance of the Liberal Party.

Mr Owen yesterday told the ICAC that he returned $10,000 he received in a car from property developer and now Newcastle mayor Jeff McCloy.

But today Mr Owen sensationally told the commission that was a lie and he in fact had put the money into his campaign.