Labor senator Sam Dastyari warned Chinese Communist Party-linked political donor Huang Xiangmo last year that his phone was likely tapped by government agencies, including the US government.
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Before the two spoke, Mr Dastyari gave Mr Huang counter-surveillance advice, saying they should leave their phones inside and go outside to speak.
The face-to-face meeting between the pair in the grounds of Mr Huang's Mosman mansion in Sydney last October came several weeks after Mr Dastyari quit the frontbench over his dealings with Mr Huang.
It also occurred after ASIO briefed senior political figures, including from the Australian Labor Party, that Mr Huang was of interest to the agency over his opaque links to the Chinese government.
Security agencies have the capacity to use mobile phones as surveillance devices without a user's knowledge.
A Canberra source with knowledge of the meeting said on background that Mr Dastyari blamed the US government for the scandal that earlier enveloped him and Mr Huang and said he was the subject of surveillance, including by the US government.
Details of the phone tap warning and other dealings involving the pair have been collected by national security officials, Fairfax Media has confirmed, and the revelations are likely to spark debate about sweeping reforms proposed by the Turnbull government to counter foreign interference in Australia.
Attorney-General George Brandis said the revelation raised questions about Mr Dastyari's loyalty.
"This comes at a time when members and senators are under intense scrutiny over whether they hold dual citizenship. Of the 226 Australians elected at the 2016 federal election, the person whose allegiance to Australia is most in question is Sam Dastyari," Mr Brandis said.
The Mosman meeting occurred more than a month after media reports in early September last year that ASIO's top spy, Duncan Lewis, had warned Labor "that some of their donors had strong links to the Chinese Government".
Those same media reports also detailed dealings between Mr Dastyari and Mr Huang. Among them were that Mr Huang had paid a $5000 legal bill for Mr Dastyari, and that Mr Huang had told a Chinese Communist Party newspaper that "political demands and political donations" should be linked.
Also among the revelations that damaged Mr Dastyari were comments he reportedly made at a press conference with Mr Huang that contradicted Labor policy on the South China Sea, and echoed Beijing's policy position.
These events led to Mr Dastyari's resignation from the Labor frontbench on September 7 last year.
Two Labor sources have also confirmed that, shortly after these events, Opposition Leader Bill Shorten warned Mr Dastyari through a "back channel" that ASIO had concerns about Mr Huang. Mr Shorten's office declined to answer questions about if or when this occurred, although a source with first-hand knowledge of the ASIO warning relayed to Mr Dastyari said it was generic and did not contain any classified information known to Mr Shorten.
On Monday, Fairfax Media asked Mr Dastyari why he had told Mr Huang his phone was tapped, and why he advised him to move outside his house and not to speak near his phone.
Mr Dastyari responded: "I reject any assertion that I did anything other than put to Mr Huang gossip being spread by journalists."
Fairfax Media also asked Mr Dastyari why he met Mr Huang in person, rather than calling him, and why he thought a face-to-face meeting was appropriate weeks after the extensive public reporting about ASIO's concerns regarding Chinese Communist Party-connected donors.
Mr Dastyari said: "After the events of last year, I spoke to Mr Huang to tell him that I did not think it was appropriate that we have future contact. I thought it was a matter of common courtesy to say this face to face."
Mr Dastyari has since begun his public rehabilitation, and was promoted to deputy senate whip in February.
Mr Dastyari said on Monday: "I have never received a security agency briefing, or received any classified information about any matter, ever. I've never passed on any protected information - I've never been in possession of any."
His statement did not address what fellow Labor officials had told him about Mr Huang.
Mr Huang, a billionaire property developer, has close ties to the Chinese consulate in Sydney and, until the weekend, headed a Sydney organisation aligned with the Chinese Communist Party's political lobbying and propaganda agency, the United Front Work Department.
On Saturday, Mr Huang stepped down as chairman of the Australian Council for the Promotion of the Peaceful Reunification of China (ACPPRC), and was lauded as a "banner" and likened to a patriotic flag who had made "heroic achievements" in the past year.
On September 14, 2016, weeks prior to the Mosman meeting, US ambassador John Berry said the US was concerned about Chinese government involvement in Australian politics, in remarks reported in connection to Mr Dastyari's dealings with Mr Huang.
On September 28, also prior to the meeting, Mr Huang dispatched members of the ACPPRC for a meeting in Beijing with a senior Chinese government official, who directed the members to "make allies to obtain international support" and contribute to the "great revitalisation of the Chinese nation".
ASIO began an assessment of Mr Huang's citizenship application in early 2016. The application remains blocked by ASIO and, earlier this year, national security officials interviewed Mr Huang at a secure Sydney CBD location.
Fairfax Media and Four Corners have previously revealed that after the citizenship request first stalled in early 2016, Mr Huang asked Mr Dastyari to intervene on his behalf. Mr Dastyari or his office called immigration officials four times in the first six months of 2016, but the senator has described this contact as routine.
The Turnbull government is planning to introduce news laws this year to counter foreign interference from Beijing and other nations and require agents or official advocates of foreign governments to register under a foreign agents registration act. The latter reform may concern ex-senior Liberal and Labor figures who work for companies or institutions controlled or directed by Beijing or its proxies.
A former intelligence officer told Fairfax Media that the instruction to Mr Huang to talk not within the vicinity of his phone amounts to counter-surveillance advice. Mr Dastyari is a security-conscious member of federal parliament who, along with many colleagues, uses encrypted applications to communicate.
