NSW anti-corruption body ICAC is reportedly dropping major allegations against federal Cabinet Secretary Arthur Sinodinos.

The frontbencher, reinstated under Prime Minister Malcolm Turnbull in 2016, resigned as Assistant Treasurer under the Abbott government, after his conduct came into question over donations to the Liberal Party by Australian Water Holdings of which he was deputy chairman.

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But NSW’s Independent Commission Against Corruption (ICAC) had advised Mr Sinodinos that no corruption findings had been made against him, The Australian reported on Thursday.

The body also dropped a key allegation of fraud against Liberal lobbyist and former AWH boss Nick Di Girolamo, whose gift of a $3000 bottle of wine to NSW premier Barry O’Farrell eventually toppled him.

The Australian understood that ICAC told the lawyers representing those those involved that the scheme “was sophisticated and drew on intimate information available only to politicians”.