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SYDNEY, Nov 20 AAP

November 20 2012, 6:11PM

The NSW government is being urged to suspend mining exploration licences granted by disgraced former Labor minister Ian Macdonald until investigations by the state's corruption watchdog are complete.

It comes as the Independent Commission Against Corruption (ICAC) heard further allegations of questionable practices by Mr Macdonald in relation to his decision to open the Bylong Valley, in central NSW, to mining operations.

Mr Macdonald, the former resources minister, is accused of favouring his former cabinet colleague Eddie Obeid by granting an exploration licence over the Mt Penny tenement in the Bylong Valley, where the Labor powerbroker and his family owned property.

The Obeids and their associates allegedly stood to make $100 million from the decision to open the valley to exploration.

On Tuesday, Labor leader John Robertson said he had written to Premier Barry O'Farrell asking that he suspend all mining exploration licences being investigated by the ICAC.

He said the opposition would offer "full bipartisan support" for any legislative changes needed to enable the licences to be suspended.

"We want to make sure that no one can benefit or profit from these licences and the way they've been issued until such time that ICAC has reached its conclusions," Mr Robertson told reporters in Sydney.

Greens NSW mining spokesman Jeremy Buckingham welcomed the Labor Party's stance, and said the Greens would table a motion in parliament on Wednesday calling for the suspension or termination of the exploration licences.

The calls for a suspension came as a former deputy head of the Department of Primary Industries told the ICAC he was surprised at how fast the Bylong Valley was opened up to coal mining.

Alan Coutts, department deputy-director general from 1997 until November 2008, said he was concerned at the pace of the expressions of interest process linked to the issuing of mining exploration licences in the coal-rich area.

The inquiry has previously heard Mr Coutts and Mr Macdonald clashed repeatedly over the rush to open 11 areas of NSW to coal mining.

"I was surprised and, I guess, concerned mainly about how we would manage this process in the timeframe that we were being asked to manage it," Mr Coutts told the inquiry.

"Putting out expressions of interest and doing them properly, you've got to be diligent, and the more you rush things, the more you can make mistakes.

"I was concerned that we weren't going to be put in a position where we could manage this process properly."

Earlier, Mr Macdonald's former deputy chief of staff, Jamie Gibson, told the inquiry it was Mr Macdonald's idea to shut out larger companies from bidding for mining licences over the area.

Both Mr Macdonald and Mr Obeid have been suspended from the Labor Party over corruption allegations.

Meanwhile, more than 250 residents in Sydney's inner west have called for the ICAC to look into Mr Obeid's involvement in the redevelopment of Balmain Leagues Club.

It follows testimony by former Labor MP Frank Sartor, who previously told the corruption watchdog that he had received calls from Mr Obeid lobbying for the redevelopment when he was planning minister.

Balmain Leagues Club spokesman Danny Munk has rejected the need for ICAC involvement, saying the suggestion "that there is something underhand going on is offensive and unfair".

By Andrew Frampton and Sam McKeith