The NSW Ombudsman's office should never have been allowed to carry out its long-running police bugging probe and ought be stripped of those powers, a cross-party inquiry has concluded.
An upper house select committee has been investigating the $6 million Operation Prospect run under departed ombudsman Bruce Barbour, whose term concluded at the end of June.
Former commonwealth ombudsman John McMillan has now taken over Prospect, which is examining a decade-old phone-tapping scandal involving members of the NSW Police top brass, including Deputy Police Commissioners Nick Kaldas and Catherine Burn, and has exposed allegations of dysfunction and bitter rivalries at the highest ranks of the force.
The committee report tabled in parliament takes aim at Mr Barbour's stewardship of the inquiry and criticises his decision not to request his contract be extended until Prospect was finalised.
"In hindsight, the jurisdiction conferred on the Ombudsman ... to conduct these inquiries should not have been enacted by Parliament and should be removed from the legislation," the report says.
"The Ombudsman's office is not a suitable vehicle for such inquiries.
"Therefore, the committee recommends that the NSW government repeal the provisions under which Operation Prospect and associated matters are being conducted by the Ombudsman's office."
The report described Mr Barbour's explanation for not seeking an extension as "difficult to accept".
"Claiming it is in the public interest to leave in light of the criticism he has faced as Ombudsman fails to recognise the impact his departure has on the progress of the investigation," the report said.
The committee also reported that a leak earlier this year of confidential material involving Mr Barbour's intention to refer Mr Kaldas to the DPP probably came from inside the DPP's office or that of the ombudsman but it was not possible to draw a conclusion one way or the other.
Both offices deny leaking that information.
The committee's deputy chair, Greens MP David Shoebridge, later described Prospect as a "monumental stuff-up".
"The extraordinary powers that were granted to the ombudsman's office to undertake Prospect should be repealed as a matter of urgency," Mr Shoebridge told AAP on Wednesday.
"While the ombudsman's office has many positive attributes, it is clearly not designed to undertake such a complex and contested quasi-criminal inquiry."
He was also critical of the standard of co-operation Mr Barbour offered during the parliamentary inquiry process.
"The ombudsman's office has a strong history of holding others to account, so it was more than surprising to see the brittleness and lack of assistance it provided when it was under review by the parliament," Mr Shoebridge said.
"No one should ever consider themselves above scrutiny."
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