Labor has moved to suspend donations from the NSW, Victorian, South Australia and Tasmanian branches of the CFMEU's construction division after the union was placed under administration.
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The ALP national executive unanimously agreed to suspend affiliation from the branches after a meeting was held to discuss Labor's future ties to the embattled union, following serious allegations of organised crime and links to bikie gangs.
ALP national secretary Paul Erikson said the suspension will remain in place until further notice.
"The number one job of any union and its officials is to look after its members. The reported behaviour is the complete opposite of this," Mr Erikson said in a statement.
Labor's federal executive said it will consider extending the suspension to other state and territory branches "should they be placed under administration."
There have been calls for Labor to sever links with the ACT and Queensland branches, after reports published by the Nine newspapers alleged criminal links between underworld figures and the construction arm of CFMEU.
Masters Builders CEO Denita Wawn said it was "critical" the federal government suspend political donations from the ACT CFMEU in the lead up to the territory's general election in October.
A royal commission into trade union governance and corruption in 2015 heard evidence of alleged corrupt payments and misconduct in the ACT branch of the union, however no further investigations were made.
The Canberra Times suggests no wrongdoing on the part of the ACT branch of CFMEU.
Speaking to reporters on Thursday, Prime Minister Anthony Albanese denied the federal government had delayed taking action against alleged corruption after state premiers intervened to suspend affiliations with state-registered union branches.
"Where we see corrupt conduct, we want it stamped out. And that's why we've taken this direct action very swiftly," Mr Albanese told reporters on Thursday.
Workplace Relations Minister Tony Burke announced on Wednesday that the government would assist the Fair Work Commission to install an independent administrator to handle the CFMEU's construction division.
He warned that the government would introduce legislation if the union challenged proceedings.
"The government will ensure the regulator has all the powers it needs to appoint administrators, there can be no place for criminality or corruption in any part of the construction industry," Mr Burke said.
The Fair Work Commission said it was considering its operational response.