Labor representatives called the continuation of administrator positions a "gross" misuse of power and public money.

Administrators were appointed to take charge of the amalgamated councils and streamline the creation of the new local governments last year.

But shadow minister for local government Peter Primrose and opposition leader Luke Foley both said the position should be run by an impartial figure, not someone who had political aspirations.

"These people have been put in as administrators with millions of dollars which no one else has access to," Mr Primrose said.

"They are able to go to all the various community groups and allocate that money at their will … no one else has got that ability."

Mr Primrose has said he has heard reports that some administrators across the state intend to contest the election.

"If it is true, I think it is a gross conflict of interest and I would suggest that it's almost tantamount to being corrupt," he said.

"I will certainly be referring it to the ICAC [Independent Commissioner Against Corruption] and asking for their advice and their deliberations if it's occurring."

Mr Primrose has written to his counterpart, the minister for local government Gabrielle Upton, requesting administrators with local political aspirations to immediately stand down.

He has also put the request on notice in both upper and lower houses of the state's parliament.

"These administrators have been paid substantial salaries by ratepayers, and exercised the full power of the council," Mr Primrose's letter to Ms Upton read.

"Given the public resources and insider information available to the administrators when compared to other candidates, their government appointment would give them a grossly undemocratic and unfair advantage."

Ms Upton declined to speak to Fairfax Media directly but a spokesman for the department of premier and cabinet said the "NSW government takes the need for fair and democratic elections seriously".

Prior to the merge of Queanbeyan-Palerang Regional Council, its current administrator Tim Overall, had served as the mayor of the Queanbeyan City Council since being elected in 2008. He is yet to confirm if he will run as a candidate in September.

Mr Overall said there were rules in place that restricted administrators in the last month before the upcoming election.

"Prior to the September elections council will enter a four week caretaker period where the same rules apply to administrators as they would to mayors of existing councils," he said.

"During the caretaker period before an election there are restrictions on the kinds of decisions that can be made by the general manager and the council – which in this case means the administrators."

Mr Overall declined to comment on Mr Primrose's request for administrators running for mayor to stand down.

"My priority at this stage is overseeing the implementation of the new Queanbeyan Palerang Regional Council," he said.