More than 47,000 flyers without authorisation have been distributed in the eastern Sydney electorate of Wentworth, held by independent MP Allegra Spender.
It claims it is "produced by the people of Wentworth, for the people of Wentworth", but a lack of official authorisation means voters do not know where its information is sourced from, putting the pamphlets in breach of Australia's main election law.
After receiving complaints about the documents, the Australian Electoral Commission has launched an investigation and is working to identify and contact those responsible, who could face thousands of dollars in fines.
"The AEC takes these matters very seriously," it said in a statement.
Once considered a blue-ribbon Liberal seat, Wentworth was taken off the coalition at the 2022 election by Ms Spender, making it a tightly contested electorate at the May 3 poll.
The pamphlet claimed Ms Spender had "misled the electorate on her positions".
The independent MP said its contents were "false, misleading and offensive" and urged anyone with information to come forward.
"Australians are asking for people to provide solutions and a vision of the future not to run negative and unlawful smear campaigns," she told reporters on Monday.
"This is what turns people off politics.
"We must do better."
Ms Spender was one of the many 'teal' independents who took the Liberals by surprise and won their electorates in 2022 by campaigning on climate action and integrity in politics.
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