A Sydney-based software company, one of whose directors is the Prime Minister's son, has been "spamming" voters with Liberal Party election material.

Tim Howard's company, Net Harbour, is taking advantage of a loophole in the Government's anti-spam laws to open a new front in the election propaganda war, via unsolicited email.

Last night the NSW director of the party, Scott Morrison, confirmed it had entered into a "a contractual arrangement with Net Harbour", involving a curious round-robin of payments.

"Because it's a contractual arrangement involving the PM's son," Mr Morrison said, "... and involves the Bennelong campaign, Mr Howard took the decision to personally fund the service, to provide the funds to enable us to do that, out of his own pocket.

"He made the funds available to the division once we entered into the agreement, to make sure the division wasn't out of pocket."