NSW Premier Gladys Berejiklian has defended frontbencher Ray Williams as a "hard working" member of parliament amid calls for him to be sacked after he was found to have accepted donations from property developers.
The Castle Hill MP was in February accused of accepting donations under the $1000 disclosure threshold from Sydney property developers between 2012 and 2013.
The NSW Electoral Commission on Thursday said an investigation had found no evidence Mr Williams "committed an offence under the (Election Funding) Act".
But the commission did say three donations came from property developers.
The Liberal Party returned the first donation in the year it was made and the commission had recovered the second donation.
The third was not detected within the three-year window which existed at the time for any prosecution to be launched.
Ms Berejiklian says she's satisfied with the commission's findings, as it "stated without qualification" that Mr Williams did not commit an offence, and no further action was required.
"Ray Williams is a hard working member of the NSW Liberals & Nationals government," she said in a statement on Friday.
Government MPs and political parties are expected to conduct themselves with the highest standards of integrity, she said.
"Make no mistake, I will not tolerate any wrongdoing."
Opposition Leader Luke Foley has criticised the premier for not taking more action, saying Mr Williams is only off the hook because the donation was received "too long ago for any action to be taken".
"If the premier has any standards at all applying to her cabinet she will remove Ray Williams from the ministry," the Labor leader told 2GB radio on Friday.
The commission examined donations made to the NSW Liberal Party by seven individuals as part of the investigation.
Four were found not to have been from property developers as defined by the Act at the time.
The remaining three donors were property developers.
Mr Williams, who handles the multiculturalism and disability services portfolios, has welcomed the decision clearing him.
"I take my responsibilities in government very seriously and have always acted with the highest level of integrity," he said in a statement on Thursday.
"I look forward to continuing to represent the electorate of Castle Hill and getting on with the job for the people of NSW."