Australia investigates 'Chinese plot' to create spy lawmaker

Australia's prime minister insisted he was "not naive" to the threat of foreign interference Monday, as authorities investigated an allegedplotby China to recruit a businessman and get him elected.

Nine network programme "60 Minutes" broadcast explosive allegations Sunday night that suspectedChineseagents had offeredChinese-Australian Bo "Nick" Zhao $679,000to run as a candidate in a federal seat in Melbourne.

The 32-year-old luxury car dealer had reportedly disclosed the alleged approach for him tospyto theAustraliaSecurityIntelligenceOrganisation (ASIO) last year, before he was found dead in a motel room in March.

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Prime Minister Scott Morrison said Monday the allegations surrounding Zhao, a member of his Liberal Party, were "deeply disturbing and troubling".

"Australiais not naive tothe threats that it faces," he told reporters in Canberra.

"And that's why westrengthened the laws, why weincreased the resources... toensureAustraliawas in the bestpossible position to deal with anythreats that come our way."

In a rare public statement late Sunday night, ASIO head Mike Burgess saidthe agency was had been "actively investigating" the matter.

"Hostile foreignintelligenceactivity continues to pose a real threat to our nation and its security," he added.

Burgess said he would not comment further on Zhao's death as it was subject to an inquest.

Police have been unable to determine how Zhao died.

Parliamentaryintelligencecommittee chief Andrew Hastie described the alleged episode in Melbourne as "surreal" and "like something out of aspynovel".

"This isn't just cash in a bag, given for favours, this is a state-sponsored attempt to infiltrate our parliament using an Australian citizen and basically run them as an agent of foreign influence in our democratic system," he told 60 Minutes.

"So this is really significant and Australians should be very, very concerned about this."

Chineseforeign ministry spokesman Geng Shuang denied the claims, accusing "some politicians, organisations and media inAustralia" of "cooking up so-called Chinaspycases."

Some inAustraliahave "reached a point where they panic at the slightest move and see threats everywhere", Geng said.

But "lies are ultimately just lies", he said at a regular press briefing.

The claims come just days after aChinesespyreportedly gave ASIO the identities of China's senior militaryintelligenceofficers in Hong Kong and provided details about how they funded and conductedoperationsin the city, Taiwan andAustralia.

China has tried to paint defector Wang "William" Liqiang as an unemployed fraudster and fugitive, but there are growing calls inAustraliato grant him political asylum.

The revelations are likely to heighten tensions between Beijing and Canberra.

Geng dismissed the allegations as a "clumsy farce" and a fabrication.

Recently retired ASIO chief Duncan Lewis said last week that China wanted to "take over"Australia's political system with an "insidious" and systematic campaign ofespionageand influence peddling.

China is also widely suspected of being behind major intrusions into the computer systems ofAustralia's parliament and a university with close ties to the government and security services.

But Beijing has previously angrily denied allegations it was covertly meddling in Australian affairs.