The husband of Liberal candidate Karen Chijoff has quit the party after admitting his role in distributing a bogus leaflet in the marginal Sydney seat of Lindsay.

Greg Chijoff has written to NSW Liberal Party state director Graham Jaeschke apologising for the flyer, which purported to be from an Islamic group and claimed Labor supported the Bali bombers.

Mr Chijoff said his wife did not know about the leaflet and was "absolutely outraged" when she heard about it.

"I can confirm that my wife Karen nor you were aware of this offensive pamphlet or were any way involved in the production and the distribution," Mr Chijoff wrote.

Mr Chijoff said it was with "deep embarrassment" that he had to advise Mr Jaeschke of his involvement with the flyer's distribution on Tuesday night.

"Apart from the obvious political and moral stupidity exhibited, I regret these actions even more for personal reasons," he said.

"My wife was absolutely outraged when she heard about the incident.

"Karen is a warm and genuine woman who has always been a strong and passionate supporter of all the different cultures present in our wonderful country.

"She would never condone the production of this pamphlet or anything like it."

Mr Chijoff said he apologised unreservedly to any member of the community who was offended by or objected to the brochure.

"I am saddened to have caused this embarrassment to the Liberal Party, and I have already resigned my membership."

The Liberals hold Lindsay by 2.9 per cent but popular local member and former minister Jackie Kelly is retiring.

Mrs Kelly, whose husband Greg Clark has also apologised for his role in distributing the flyers, this morning dismissed it as a "Chaser-style prank".

Ms Chijoff's campaign manager Chris Hall told AAP in Penrith today that both he and Ms Chijoff had no knowledge of the bogus election campaign pamphlet.

"Karen and I (Chris Hall) had no knowledge of this offensive flyer prior to the incident and any further comment will be made by the state director," Mr Hall said.

Despite Ms Chijoff being nowhere to be seen in the electorate all day today, Mr Hall maintained they had been out canvassing in Penrith shopping centres.

AAP