The former New South Wales premier Nathan Rees says allegations before a corruption inquiry have dragged the Labor Party's name through the mud.

Mr Rees arrived at the Independent Commission Against Corruption (ICAC) this morning to give evidence at the inquiry into a coal licence in the Hunter Valley.

The ICAC is investigating the Doyles Creek licence that former mining minister Ian Macdonald granted to ex-union official John Maitland in 2008.

He is accused of granting the licence without a tender in a move described as a 'financial disaster for the people of New South Wales'.

Arriving at the ICAC, Mr Rees says it was important to get to the bottom of what went on.

"The allegations are a stain on public administration in NSW," he said.

Mr Rees says there is no question the inquiry is having a negative effect of federal Labor.

"This has been an ongoing saga now for some months as the party has been dragged through the mud by the allegations against a couple of individuals, and I stress a couple of individuals," he said.

"The vast bulk of the party are deeply distressed by what's going on.

"I want maximum transparency and maximum sunlight on this. It's the only way that we can restore confidence in public administration in New South Wales."

The ICAC follows the long-running Operation Jasper investigation into the Mount Penny licence issued by Mr Macdonald in the same area.

Mr Ipp will hand down his findings into both inquiries at the end of July.

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