SYDNEY An Australian state on Thursday imposed a three-month ban on PricewaterhouseCoopers' (PwC) local unit from receiving new tax-related contracts - the latest repercussion to hit the firm after its misuse of confidential federal government tax plans.

PwC has come under fire after a former tax partner in the firm who was advising the Australian federal government on laws to prevent corporate tax avoidance shared confidential drafts with colleagues that were used to pitch to companies for work.

The action by New South Wales, home to Sydney and Australia's most populous state, is a "proportionate response to the current investigations involving PwC," Courtney Houssos, the state's finance minister, said.

PwC will also be required to remove staff with links to the leak from all contract works for the state government - a move that the federal government has also demanded and PwC has agreed to. Last week, PwC named at least 67 current and former staff involved in the leak of government tax plans.

"I was appalled by the breach of trust that occurred with the federal government. As additional evidence comes to light we will continue to toughen our regime and protect the ... community from this behaviour," Houssos said in a statement.

PwC, one of the world's "big four" audit and advisory firms, declined to comment. Acting CEO Kristin Stubbins apologised for the leak on behalf of the firm in an open letter last month.

The Australian Federal Police is investigating the misuse of confidential government documents and four major pension funds have paused work with the firm. Some private-sector clients and government agencies have also suspended or are reviewing their dealings with PwC.

(Reporting by Renju Jose in Sydney; Editing by Edwina Gibbs)