Prime Minister Julia Gillard said on Friday it was normal in the world of politics for opposing sides to keep tab on what the other was doing, providing a thinly-veiled defence on the alleged 'dirt files' that one of her senior staff has collected.

Ms Gillard issued the remarks following the emergence of reports that Nick Reece, who works under the office of the Prime Minister, was responsible for maintaining dossiers that record specific information about key members of the Coalition.

However, Mr Reece has since resigned, according to a Friday report by The Australian citing confirmations provided Wednesday night by unidentified Labor insiders.

In an interview with ABC today, Ms Gillard clarified that she had yet to see the documents that were allegedly complied by Mr Reece's team, hinting that she was not closely monitoring all the activities of her staff.

But she stressed that to have certain information that gives clear perspective on what the other side was doing was not entirely wrong.

"I think scrutiny to help people weigh the worth of those ridiculous and extravagant claims is something that informs the public debate," The Daily Telegraph quoted Ms Gillard as saying.

She added that "people are entitled to know that so that they can weigh the worth of those doom-and-gloom claims."

Media reports said that Labor and Liberal sources have admitted that some amount of 'dirt files' may have been kept by some politicians but the documents were allegedly sourced from public records.

Such manner of obtaining documents was far from the tactics attributed by an ABC report to Mr Reece, who reportedly presided over on deliberate efforts to dig-up compromising details that Coalition frontbenchers were engaged to.

Opposition Leader Tony Abbott viewed the report as reflective of the desperate efforts by the Labor government to turn back the tide of its probable defeat next year.

It only proved that the Gillard Government was ethically challenged, Mr Abbott said on Friday.

"I think it is typical of this government that a dirt unit should be operating (under Ms Gillard's office) ... and no doubt with her express and enthusiastic participation," the Liberal leader told The Australian.

Also, Mr Abbott dismissed suggestions that the Coalition does not categorically distance itself from such activities.

A report by Big Pond said today that as a minister in the Howard Government, Mr Abbott had hinted that the then Liberal authorities were also secretly monitoring the movements of the Labor opposition.

Mr Abbott flatly denied that a crew under Prime Minister John Howard collected information detailing the activities from the other side of the fence though The Australian wrote that both Labor and Liberal figures have conceded that having such files in the possession of certain political parties, whether they were in power or not, was not peculiar at all.

They echoed Ms Gillard's words that say scrutiny of the other side could be employed for making informed decisions.