Sydney’s Auburn City Council has decided how to respond NSW Local Government Minister Paul Toole’s ultimatum.

Mr Toole gave the council 14 days to show why it should not be suspended, while planning decisions have been placed under review.

The council met on Wednesday night, opening with a move by George Campbell - a member of the council's minority bloc that Mehajer calls the “poor four” - to ask that innocent councillors be spared Mr Toole’s punishment.

Campbell’s move was rejected.

Instead, the council's “super six” voting bloc chose a compromise solution.

The council resolved that if it was allowed to keep running, it would be on its best behaviour, co-operate fully with the review of planning decisions by Sydney lawyer Richard Beasley, and refrain from all making any big planning decisions.

Prominent and controversial deputy mayor Salim Mehajer spoke against the proposed suspension.

“We don't understand what the concern is,” Cr Mehajer said.

Auburn mayor Le Lam suggested the inquiry was orchestrated by council's “poor four”.

“Giving information to the public and the media is how the whole thing instigated,” she said.

“Now, by the end of the day, everything can come out fully.”

The Local Government minister's letter to the council referred only to one case of alleged wrongdoing - the sale of a council carpark to Cr Mehajer in a private deal allegedly up to $5 million less than its open-market value.

“It's got to be more than that,” Cr Mehajer said.

“The letter just doesn't guide us.”

Cr Mehajer said it was important to note that the car park - which his family company has applied to turn into a 100-unit complex - was located in Lidcombe, not in Auburn as Mr Toole suggested.

Media reports have recently linked a range of councillors, directly and through relatives, to business ventures that are not disclosed to council.

Mr Toole is expected to respond to council's submission, but has no official timeline to do so.