Allegations that Pauline Hanson’s office inappropriately funnelled money out of One Nation’s NSW branch are serious and must be investigated, the state’s premier says.

Upper house MPs Mark Latham and Rod Roberts quit the minor party on Tuesday after claiming under parliamentary privilege that officials had misappropriated taxpayer funds.

Mr Latham alleged more than $270,000 had been moved out of the state party and federal executive in recent years for merchandise and equipment.

Senator Hanson rejects the allegations, saying party finances are subject to regular independent audits.

Premier Chris Minns said the money had been provided to the party’s NSW branch by taxpayers and needed to be protected.

“These allegations are very serious,” he told reporters on Wednesday.

“They need to be investigated and I’m sure they will be by … the electoral commission, (which) has very strong powers both to investigate and prosecute misuse of taxpayer funds.”

The commission’s investigation has also been welcomed by the man in the sights of the departing MPs.

Under parliamentary privilege, the now-independent Mr Roberts dubbed Senator Hanson’s chief-of-staff James Ashby “a conman, a spiv and a fraudster” for his alleged involvement in shifting funds.

“This whole sordid saga is not about election results but a pure grab for money in something that I will not be part of,” he said.

In response, Mr Ashby said he was considering defamation action.

“To walk away like this and to spit in our faces and just completely lie, I hope that the Electoral Commission in NSW does investigate this,” Mr Ashby told Sky News on Tuesday night.

In a letter to Special Minister of State John Graham tabled in state parliament, Mr Latham said more than $270,000 had been moved out of the state party and federal executive in recent years for various supplies.

In one instance, $102,000 in taxpayer funds paid to NSW One Nation after the 2019 election was allegedly redirected to the party’s Brisbane office and used to buy warehouse equipment and merchandise.

Senator Hanson said party finances were subjected to regular audits by chartered accountants and state and federal electoral commissions.

One Nation is now solely represented in the state parliament by former Labor MP Tania Mihailuk, who switched allegiances shortly before the March election.

Mr Minns said there was no path for her to return to Labor if she also decided to quit the minor party.

Ms Mihailuk told supporters she would interrogate her former colleagues’ concerns and was open to reforms.

“No individual is bigger than our great party,” she said.

– AAP