ICAC: Former Liberals Tim Owen and Andrew Cornwell resign from Parliament after corruption hearings (ABC)

ABC Andrew Cornwell (left) and Tim Owen (right) resigned after admitting they accepted money from developers.

Two former New South Wales Government MPs have resigned from Parliament hours after one admitted lying to the state's corruption commission.

The resignations of Newcastle MP Tim Owen and Charlestown MP Andrew Cornwell follow their admissions they accepted money from developers, who are not allowed to make political donations under NSW electoral laws.

NSW Premier Mike Baird called on both to resign after Mr Owen admitted lying to the Independent Commission Against Corruption (ICAC), and Mr Cornwell earlier told the ICAC he accepted money from banned donors during the 2011 election campaign.

Both men stood aside from the party last week after allegations of wrongdoing were heard by the commission.

Mr Owen told the ICAC on Monday that developer Jeff McCloy, who is now the Lord Mayor of Newcastle, handed him an envelope full of $100 notes during the 2011 state election campaign.

Mr Owen said he later put the envelope back into Mr McCloy's letterbox, but on Tuesday he said that part of his evidence was false and he actually used the money for his campaign.

Mr Baird said resigning from Parliament would be the honourable thing for Mr Owen and Mr Cornwell to do.

"Ultimately it is up to them, but what I'm saying upon the evidence that we have seen and the comments that have been made, they should consider their positions as members of Parliament," Mr Baird said.

Mr McCloy has so far resisted calls to resign as Lord Mayor.

Mr Baird was asked in State Parliament why he has not suspended Mr McCloy in the wake of the revelations.

"There must be formal findings from ICAC to do that," he answered.

"As the Minister made the point this morning, he has also said that the Lord Mayor should consider his position and that is absolutely right, that is something he should taken into account, that is something that he should consider."

Mr Baird added that by-elections would be held before NSW goes to the polls in March 2015.

Owen and McCloy 'met to plan ICAC evidence'

Under cross-examination by Ian Faulkner SC, who was representing Mr McCloy at the ICAC, Mr Owen admitted that he kept the $10,000 Mr McCloy gave him and "rolled it towards" his campaign.

Mr Owen also said that, in recent months, he had several meetings with Mr McCloy, who is now the Lord Mayor of Newcastle.

He said at one of the meetings, two days ago in Mr McCloy's office, the two men agreed they would both falsely tell the inquiry Mr Owen had returned the cash.

"I was just concerned that he was going to get into trouble and I was going to get into trouble," he said.

"He and I shook hands on that and then I left."

Mr McCloy's barrister disputed that evidence and said his client had urged Mr Owen to tell the truth.

"He [Mr McCloy] said to you, 'you're rolling the dice Tim, I'm telling you, you have to tell them the truth'," Mr Faulkner said.

He put to Mr Owen that he had responded to Mr McCloy by saying: "I can't ... my wife will divorce me [because] I've sworn on a stack of bibles that I didn't receive any money."

Mr Owen said: "That's not how it happened".

Mr Owen said he wanted to come clean after giving the evidence on Monday afternoon.

"I wanted to retract that statement and say yesterday that he did actually give me money and that went to my campaign," Mr Owen said.

Opposition defends chief of staff named by ICAC

Meanwhile, NSW Opposition Leader John Robertson has defended his decision not to force his chief of staff Ian MacNamara to step aside after he was named in the ICAC's opening address.

Mr MacNamara, who was a protege of former Labor powerbroker Joe Tripodi, was named as one of two people who may have leaked information as part of a smear campaign against the then-Labor MP for Newcastle, Jodi McKay.

The State Government has accused Mr Robertson of having double standards and not cleaning up his own political house.

Mr Robertson has refused to address reports that several members of his own caucus have expressed concern that Mr MacNamara had not been stood aside.

"He has said that he has done nothing wrong and he has not been contacted by the ICAC," he said.

"I'm not going into private conversations that I've had with anyone in my caucus."

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