The chairman of the Australian Broadcasting Corporation has stepped down amid allegations that he ordered the firing of journalists deemed too critical of the government.

Justin Milne resigned from the national broadcaster amid reports he had asked for journalists to be fired because their reporting was disliked by the Australian government.

How the dust settles remains to be seen, but the events are the culmination of rising political temperatures regarding the role and performance of the publicly owned ABC, which although it enjoys statutory independence from government has been under pressure for its perceived left-leaning political bias.

Sources at the ABC said employees had made it clear to board members on Thursday that ABC staff were so angry they were prepared to walk off the job in protest if Milne did not resign.

"Nobody ever told me to hire anybody, fire anybody or do anything else".

But Prime Minister Scott Morrison's hope that "normal transmission" will now resume is the wishful thinking of a government that desperately hopes the ABC won't become an election issue, either in the impending Wentworth by-election or at next year's general poll.

"I feel that the interests of the ABC have always been uppermost in my mind".

The ABC is regularly ranked as Australia's most respected media organizations, an institution which has a place at the heart of the country's cultural, political and sports scenes.

Both the Greens and Labor have placed their support behind a Senate inquiry into political interference at the ABC, saying that it's important that any investigation into potential government interference at the ABC must be independent.

An email has shown Mr Milne asked Ms Guthrie - who was herself sacked on Monday - to fire Ms Alberici in May.

He said he did not remember telling Ms Guthrie to "shoot" political editor Andrew Probyn, but conceded raising "the Probyn issue" with the ABC's senior leadership team, which includes news director Gaven Morris and editorial director Alan Sunderland.

The ABC's acting managing director David Anderson emailed staff on Thursday afternoon in a bid to reassure them the organisation's independence would "never be compromised".

Media mogul Rupert Murdoch (L) and then Prime Minister Malcolm Turnbull (C) in a 2016 file photo.

Her comments come as former prime minister Malcolm Turnbull denied demanding Ms Guthrie sack chief economics correspondent Emma Alberici over her reporting.

Mr Turnbull personally complained about Probyn to Ms Guthrie at a gathering prior to last year's AFL Grand Final, as Fairfax Media has reported.

"The bottom line is I've never called for anybody to be fired". "My concern has been on the accuracy and impartiality of reporting".

The demand by the ABC chairman Justin Milne that Emma Alberici be fired is under investigation. Milne and Turnbull are friends of long standing.

Powerful factions in the Liberal Party, the dominant partner in the coalition government, are openly hostile to the ABC and are now actively campaigning to have it sold off on the grounds public funds should not be used to support a news organization in a free market economy.