Woolworths has confirmed Queensland Government MP Scott Driscoll approached the company with an offer last year.
The Courier Mail newspaper is reporting Mr Driscoll asked the grocery giant for cash to help prop up the retailers lobby group that he had previously headed.
A spokesman for Woolworths says the offer was rejected.
Mr Driscoll, the Member for Redcliffe, was suspended from the Liberal National Party (LNP) yesterday, while the matter is being investigated.
He has denied any wrongdoing.