Labor MP Emma Husar has been cleared of sexual harassment claims but an investigation has found she made unreasonable demands of staff who accused her of bullying.
After the federal western Sydney MP announced earlier in the week she would quit politics at the next election, the NSW Labor report released on Friday said she did not have to resign.
Ms Husar says she would have stayed on and recontested her marginal seat of Lindsay if the allegations against her had not been leaked.
She said if she was able to respond to the allegations without the "public attacks" she would have been able to put it behind her and continue serving the people of Lindsay.
"As it stands, I have done what I could in the interests of the Labor party by announcing I would not recontest the seat of Lindsay," she said in a statement on Friday after the report was released.
Labor leader Bill Shorten said on Wednesday she had done the right thing by quitting.
While lawyer John Whelan's report found "there is no basis for Ms Husar to resign from the Australian Parliament", it backed up many of the allegations from 22 former electorate staff who accused her of bullying.
"Complaints that staff were subjected to unreasonable management, including unreasonable communication, demands, practices and disciplinary methods have merit," the report said.
"After considering all sides of the relevant issues the assessment has generally favoured the complainant's perception of events."
Two former staff members told BuzzFeed News they may take Ms Husar to the Fair Work Commission or a civil court.
The report called for a "return to work" plan to make sure Ms Husar's office runs smoothly into the future - a recommendation she has agreed to.
It also called for an investigation into use of her parliamentary expenses, and another investigation into the way her staff were used to perform non-electorate work duties, such as walking her dog and picking up after it and minding her children.
Claims Ms Husar sexually harassed a staff member were not supported on the balance of probabilities, while a claim she exposed herself to another federal MP was also not supported.
The investigation into Ms Husar's office has dragged on for months, but only became public in recent weeks when some details leaked - which the report found was "reprehensible".
Ms Husar said the report had cleared her of the most malicious and damaging of allegations, which were "not only baseless but leaked to media".
"I don't believe any of these should have cost me my reputation, my job, or humiliated me and my children," she said in the statement.
Liberal frontbencher Christopher Pyne said the issue would not go away.
"It looks like it is going to continue to fester for Bill Shorten and the Labor Party," Mr Pyne said.
Mr Shorten said he did not know about the investigation until it was leaked to the media, even though his former leadership rival Anthony Albanese had known for weeks.
The Independent Parliamentary Expenses Authority is already investigating Ms Husar's expenses, based on her own referral.
Australian Associated Press