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Angus Taylor Won't Be Stood Down As Police Investigate 'Fraudulent' Document Claim: PM

Scott Morrison has confirmed Angus Taylor will not be stood down as police investigate whether his office was involved in the creation of a fraudulent document relating to the City of Sydney Council's spending.

NSW Police confirmed on Tuesday it had opened an investigation into the creation of an allegedly fraudulent document relating to Taylor's attack on Sydney Mayor Clover Moore.

Taylor has called the claims an "outrageous accusation", rejecting that he or his office was involved in the creation of the documents in question, but said he would cooperate with any investigation.

Labor leader Anthony Albanese quickly seized on the news during parliament's Question Time, asking the prime minister to stand Taylor aside from the front bench.

Morrison responded by telling the House while he takes matters of ministerial standards very seriously, he has determined there is "no action" required.

"I have since spoken with the New South Wales Police Commissioner about the investigation and the nature and substance of their inquiries which he advised me were based only on the allegations referred to by the Shadow Attorney General," the PM said.

"Based on the information provided to me by the Commissioner, I consider there is no action required by me under the clauses 7.1 and 7.2.

"The NSW Police should now be left to lead their inquiries which will be considered upon their completion."

Scott Morrison said he would seek further information over the police investigation. Image: AAP

Earlier on Tuesday, a NSW Police spokesperson told 10 daily the force is "in the early stages of investigating information into the reported creation of fraudulent documentation".

"Detectives from the State Crime Command’s Financial Crimes Squad have launched Strike Force Garrad to investigate the matters and determine if any criminal offences have been committed," the spokesperson said.

"As investigations are ongoing, no further information is available."

Morrison had previously told parliament during question time he had not yet heard of the action -- which was first reported just as the daily session began.

Morrison said at the time that he would "form a view" after gathering more information.

"This is a very recent matter, and I will be happy to take advice from the New South Wales Police in relation to any matters that they're pursuing," the Prime Minister said.

Albanese asked Morrison several questions over whether he would stand Taylor aside from the frontbench, citing the federal Statement of Ministerial Standards, which outlines that "it is for the Prime Minister to decide whether and when a Minister should stand aside if that Minister becomes the subject of an official investigation of alleged illegal or improper conduct."