The Yesh Atid leader has drawn heat over the affair. But an indictment is sure to encourage his political rivals-including those from within his own Likud party-to move against him.
Lapid said: "That's how criminals talk, not public servants".
Police said in a statement they were recommending his indictment on bribery, fraud and breach of public trust. Netanyahu has denied allegations in this case.
Netanyahu has been denying wrongdoing but he has been questioned several times since a year ago.
It is now up to Israel's attorney general, Avichai Mandelblit, to file charges against Netanyahu, 67, a process that could reportedly take weeks if not months.
He says that "until that decision".
Police recommended Milchan also be charged with bribery.
"The truth will come to light and nothing will come of this".
Tzipi Livni, part of the main opposition Zionist Union alliance that also includes Labour, criticised what she called a campaign to undermine the police. But the longtime premier Netanyahu angrily rejects the accusations, which include accepting almost $300,000 in gifts from two billionaires.
In what is known as Case 1000, Netanyahu and his wife, Sara, are alleged to have received illicit gifts from billionaire benefactors, including some NIS 750,000 ($212,000) worth of cigars, champagne, jewelry and clothing from Hollywood mogul Arnon Milchan and some NIS 250,000 ($70,000) worth of gifts from Milchan's business partner James Packer. In exchange, police say Netanyahu used his power to help Milchan in a number of ways, like helping to extend a USA visa and aiding businesses and deals in which Milchan had a stake.
"He didn't receive bribes at all. Not in a single day, not in a year, not at all", Mr Hadad said. Parliament could also enact a special procedure against him before his case is exhausted if he was found to be guilty of moral turpitude.
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"A prime minister that busies himself with attacking his police and law enforcement is simply attacking himself, attacking the country".
Kahlon further stated, "The systems should be allowed to operate without pressure, either from the right or from the left, and to act in an orderly, professional and prudent manner".
"All I did was for the benefit of the state of Israel", Netanyahu said, as reported by The Jerusalem Post.
Two bigger corruption cases have edged close to Netanyahu without directly entangling him as a suspect.
The 68-year-old has denied any wrongdoing and claims the recommendations "will end with nothing".
Netanyahu was critical of the police in his remarks on Wednesday, as he has been for months. They'll say 'So what if he took some gifts and some money?
In Tuesday's statement, Netanyahu said nothing would "sway" his decision to stay in his role.
The development deals an embarrassing blow to the embattled prime minister and is likely to fuel calls for him to resign.
In a statement, Lapid said Tuesday that "police asked me to testify in Case 1000, and like any good citizen I responded".
He accused police of being on a witch hunt and vowed to remain in office and even seek re-election.
In another column in Maariv, Ben Caspit said that Netanyahu's ultimate fate, in the hands of political allies who could bolt his governing coalition, "will only become clear in the street, in the polls, in the critical mass in the hearts and minds of Israeli citizens who still believe that Israel deserves an honest prime minister".