Potential links between property developers and members of a Sydney council should be referred to the state's corruption watchdog, a NSW parliamentary inquiry has found.

The upper house probe was established after former Labor MP Tania Mihailuk used parliamentary privilege to accuse Canterbury-Bankstown mayor Khal Asfour of having improper links with disgraced former party powerbroker Eddie Obeid.

Mr Asfour was an upper house candidate for Labor at the NSW election but withdrew after reports he used ratepayer funds to pay for designer clothing and spa treatments during an overseas trip.

Inquiry chair and Liberal MP Aileen MacDonald said close relationships between the city's councillors and property developers might have influenced planning and where infrastructure was positioned.

"The committee regards this as a highly concerning and serious matter and has therefore recommended in this report that the committee refer these concerns to the Independent Commission Against Corruption.

"(Mr Asfour's) expenses for designer suits, a spa treatment on an overseas council-funded trip and his attainment of a master of business administration are out of step with the community's expectations."

The findings were lambasted by Mr Asfour, who said it was a targeted political attack with scant evidence.

"This is a public lynching and those responsible for producing this report should hang their heads in shame," he said on Tuesday.

"The key findings are a joke and the report makes a number of assertions and fallacies around relationships with developers that are based on no evidence or material presented to the committee."

Mr Asfour was cleared of any wrongdoing in a separate inquiry set up by Canterbury-Bankstown Council to investigate Ms Mihailuk's allegations.

That investigation, led by top silk Arthur Moses, found there was no evidence of any corrupt or unlawful acts by Mr Asfour, nor any breaches of councillors' code of conduct or the Local Government Act.

Mr Asfour, who has denied any wrongdoing, accused the committee of determining the outcome before hearing evidence.

"They were hell bent on asking questions about the investigator and not examining the findings of the (Moses) review which cleared both myself and the council of any wrongdoing," he said.

While Mr Asfour had not breached local government guidelines, the upper house inquiry recommended the Office of Local Government conduct a review of the guidelines to meet public expectations.

The committee also said the delivery of thousands of documents over a delayed timeline and the suspension of the parliament ahead of the NSW election hampered its work.

Mr Asfour said he and council staff provided more than 20,000 documents.

"We turned up and answered all they had to throw at us and after everything they were left with thin air. Nothing to see," he said.