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THE NSW Labor Party has gone into damage control over sensational allegations of bribery and corruption within Wollongong City Council, suspending five party members implicated in the scandal.

Three ministers have been dragged into the widening furore, with the Government of Premier Morris Iemma reeling from claims of jobs for mates and a trail of political donations from allegedly corrupt developers, The Australian reported.

Labor-controlled Wollongong Council was yesterday left to swing in the breeze by the state Government, with Local Government Minister Paul Lynch refusing to take calls from council general manager David Farmer.

The allegations have emerged from explosive evidence at an Independent Commission Against Corruption hearing, where it was alleged a town planner, Beth Morgan, was involved in sexual relationships with three developers - and received cash and gifts from two of them - while she was approving their property developments worth a combined $135million.

Ms Morgan, a 32-year-old divorcee and mother of one, regularly attended morning meetings with the three developers, Glen Tabak, Michael Kollaras and Frank Vellar, at a Wollongong kebab shop in a group called "the table of knowledge", an informal meeting of business and council heavyweights.

Mr Tabak and Mr Kollaras maintained their usual practice of a 6.30am coffee at the shop yesterday, just hours before they gave evidence at the ICAC inquiry.

Members of their group told The Australian yesterday "the table of knowledge doesn`t really exist" but Mr Kollaras later told the inquiry he started the "table of knowledge" about 10 years ago.

In the witness box, Mr Kollaras denied having an affair with Ms Morgan but was presented with a series of highly personal emails between them.

In one, she called Mr Kollaras "my favourite, sexy, delectable, gorgeous Greek".

He explained the emails by saying she was an "extremely close friend".

In his evidence, Mr Tabak told the inquiry Ms Morgan was possibly "on a mission for sex" and believed she "wanted to be surrounded by successful people" by liaising with developers.

The political dimension of the scandal widened when it emerged that two conmen, posing as corruption investigators, allegedly extorted a $30,000 payment from Labor powerbroker and council staff member Joe Scimone in exchange for offering to destroy evidence against him.

Mr Scimone left the council in February last year after sexual harassment claims and went on to receive a $200,000 a year position with NSW Maritime, a department controlled by his friend Joe Tripodi, the Ports Minister.

Mr Scimone, who denies he quit because of the claims, was among those suspended from the ALP yesterday.

Three more ALP members bounced from the party are Wollongong Labor councillors accused of soliciting bribes from developers in exchange for planning approvals: Frank Gigliotti, Zeki Esen and deputy lord mayor Kiril Jonovski. The fifth suspension is Labor councillor Val Zanotto, who is accused of paying the same conmen $120,000 to pervert the course of justice.

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NSW Opposition Leader Barry O`Farrell yesterday renewed his call for Mr Iemma to allow ICAC to investigate Mr Tripodi, labelling him the "tar baby" of the NSW Labor Government.

"We have a Premier who reacts to the appointment of a Labor mate to a $200,000-a-year job in government by setting up an in-house inquiry and ignoring the state`s anti-corruption watchdog," Mr O`Farrell said.

Mr Tripodi denied helping Mr Scimone get the NSW Maritime job and said he did not know he was a person of interest to ICAC until this week.

Mr Iemma said he had asked ICAC if the recruitment process at NSW Maritime warranted an external inquiry.

There were further signs of trouble for Mr Iemma last night when John Sutton, national secretary of the construction division of the Construction Forestry Mining and Energy Union, said it was time for Mr Iemma to stand aside for Deputy Premier John Watkins.

Adding to his problems, there is speculation that high-profile Environment Minister Phil Koperberg, who recently returned to work after being cleared of domestic violence allegations, will today announce his retirment from cabinet, citing ill health.

The pressure being felt in government circles was also evident when NSW Housing Minister Matt Brown cut short a press conference after reporters quizzed him on political donations he received from a company associated with developer Glen Tabak.

Mr Tabak allegedly began a sexual relationship with Ms Morgan and showered her with gifts to receive favourable treatment of applications.

Police Minister David Campbell was also friendly with Mr Scimone, who helped with his election campaign. And Sydney`s The Daily Telegraph reports today that Health Minister Reba Meagher and her predecessor John Hatzistergos are also being questioned about their knowledge of Mr Scimone`s appointment to a health department committee in 2005.

At the ICAC hearing yesterday, Mr Tabak said he was a friend of Mr Scimone and had sold him a unit in one of his developments. He said Mr Scimone told him he paid $30,000 to two men who said theycould help him with the ICAC investigation.

Independent Wollongong councillor David Martin yesterday successfully moved for an emergency council meeting on Monday to ask the four Labor councillors to stand aside.

- Additional reporting: Lauren Wilson

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