Embattled Labor MP Emma Husar has been cleared of sexual harassment allegations in a report that says she did not have to resign from parliament.

But the NSW Labor report, released on Friday, did find Ms Husar made unreasonable demands on her taxpayer-funded staff, including getting them to perform non-work duties.

“Based on this assessment, there is no basis for Ms Husar to resign from the Australian Parliament,” lawyer John Whelan’s report said.

The critical report also found the release of a “selection of matters subject to this assessment in the public domain was reprehensible”.

It “had served to elevate tensions in an environment in which many have reported the stress this matter has placed on their mental health,” the report said.

The federal western Sydney MP said on Wednesday that she would not recontest her seat of Lindsay at the next election. However, the report cleared her “on the balance of probabilities” of sexually harassing a staff member.

A claim she exposed herself to another federal MP was also not supported. However, it did find many of the allegations from 22 former electorate staff had merit.

“Complaints that staff were subjected to unreasonable management including, unreasonable communication, demands, practices and disciplinary methods have merit,” the report said.

It also called for an investigation into use of Ms Husar’s parliamentary expenses, and another investigation into the way her staff were used to perform non-electorate work duties.

These duties included walking her dog and minding her children.

Emma Husar has already said she will stand down at the next election. Photo: ABC News

Ms Husar’s announcement on August 8 that she would not recontest her seat followed weeks of damning accusations and an ongoing NSW Labor investigation into alleged workplace bullying.

Allegations aired by Buzzfeed, including that she had exposed herself to fellow Labor MP Jason Clare, were “completely untrue, unfair and hurtful beyond belief” Ms Husar said on Twitter.

Mr Clare also said the claim was categorically untrue.

In a statement on Facebook on Friday, Ms Husar said she had been cleared of the most malicious and damaging allegations, which were “not only baseless but leaked to media”. (See the full statement here.)

“Having only seen the summary findings in the form of a media statement, I don’t believe any of these should have cost me my reputation, my job, or humiliated me and my children,” she said.

“I’ve always maintained that anyone has the right to have their complaints heard in the proper forum. Instead this has been trial by media, gossip and innuendo.”

Ms Husar said she was “gutted” that certain people and elements of the media had been so willing to attack her.

“[The] unfounded accusations … caused so much personal, emotional and professional damage to me, so much hurt to those close to me, and political harm to the party I love, have supported and worked so hard for,” she said.

She said if the situation had been handled better, she believed she would have been able to continue as an MP.

“As it stands, I have done what I could in the interests of the Labor party by announcing I would not recontest the seat of Lindsay,” she said.

Labor leader Bill Shorten said Ms Husar had done the right thing by the party when she quit.

“In terms of what she’s done and what she hasn’t done, she will get a chance to read the report and people will learn the lessons,” he said on Friday.

“Everyone needs to be treated with respect out of this process and there is little more I can add.”

-with AAP