Scott Morrison is deeply disturbed about allegations of a Chinese plot to infiltrate Australia's parliament via his own political party.
The prime minister has sought to assure Australians his government is doing everything possible to protect against foreign interference.
Explosive allegations aired on the Nine Network's 60 Minutes suggested Chinese operatives offered $1 million to fund Liberal Party member Nick Zhao's tilt at federal parliament.
The 32-year-old was found dead in a Melbourne hotel room in March after reportedly approaching ASIO to discuss the plot.
"I find the allegations deeply disturbing and troubling," Mr Morrison told reporters in Canberra on Monday.
"I would caution anyone leaping to any conclusions about these matters. And that's why we have these agencies."
China claims it has never tried to meddle in other countries' internal affairs and isn't interested in doing so.
Foreign ministry spokesman Geng Shuang also told a press briefing in Beijing on Monday that some Australian media outlets have fabricated allegations of interference.
The head of ASIO has issued a rare public statement confirming the domestic spy agency is actively investigating the allegations.
"Australians can be reassured that ASIO was previously aware of matters that were reported today, and has been actively investigating them," Director-General Mike Burgess said.
"Hostile foreign intelligence activity continues to pose a real threat to our nation and its security. ASIO will continue to confront and counter foreign interference and espionage in Australia."
Mr Morrison said his government had strengthened laws and powers of intelligence and security agencies to stymie foreign spies.
He said the government was more informed on the impacts of foreign interference than any other before it.
"Significant investment, significant legal reform, significant resourcing, finding the best people in the world to do these jobs, and keep us equipped to keep Australians safe and to protect the Australia that we love - that's the assurance I give Australians," he said.
The prime minister said leaders from several other countries were interested in following Australia's lead on countering foreign interference.
Labor is seeking an urgent briefing from intelligence agencies.
Deputy opposition leader Richard Marles said people needed to be confident Australia was free from foreign interference.
"But on the face of it and what's in the public domain right now, this is a very, very serious matter," he said.
Liberal backbencher Andrew Hastie, who was briefed on Mr Zhao's death as chair of the parliamentary committee on intelligence and security, said it was like something out of a spy novel.
"This isn't just cash in a bag, given for favours, this is a state-sponsored attempt to infiltrate our parliament ... Australians should be very, very concerned about this."
Nationals backbencher Barnaby Joyce was not surprised by allegations China tried to plant a spy in parliament.
"I know the Chinese, in one way or another, have been trying to infiltrate our parliament, whether online or directly through politicians," he said.
"We must be resolute and strong and realise this is the new world order we are living in."
Similarly, One Nation leader Pauline Hanson said the allegations were distressing.
It is the second allegation in as many days of attempts by the Chinese government to influence Australian politics.
A self-proclaimed Chinese defector provided ASIO with details of how Chinese military intelligence officers fund and conduct political interference operations in Hong Kong, Taiwan and Australia.
Wang Liqiang is now seeking asylum in Australia.
Australian Associated Press