Luke Foley has stepped down as opposition leader after an ABC journalist went public with allegations he behaved inappropriately towards her during a 2016 Christmas party.
At a brief press conference, Mr Foley denied the allegations, but said his position was untenable.
"The allegations against me today made public by the ABC are false. I've retained solicitors and senior counsel to advise on the immediate commencement of defamation proceedings in the Federal Court of Australia," he said.
"However, I can't fight to clear my name and fight an election at the same time. It's just not possible to do both."
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He said he will be remaining as the member for Auburn, before leaving and refusing to take questions from reporters.
Earlier in the day, the ABC released the statement from Ashleigh Raper, alleging she was inappropriately touched by Mr Foley at a Christmas party in 2016.
"He put his hand through a gap in the back of my dress and inside my underpants. He rested his hand on my buttocks. I completely froze," Ms Raper said in the statement.
Ms Raper said Mr Foley, who succeeded John Robertson as NSW Labor leader in 2015, had called her earlier this month to say he was sorry and that he would stand down as leader.
“He told me that he had wanted to talk to me about that night on many occasions over the past two years because, while he was drunk and couldn’t remember all the details of the night, he knew he did something to offend me.
“He apologised again and told me, “I’m not a philanderer, I’m not a groper, I’m just a drunk idiot”.
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She said Mr Foley told her he would step down either on Monday, November 5 or Wednesday, November 7.
However, he later “informed me he’d received legal advice not to resign as Opposition Leader”.
“He indicated he intended to follow that advice.”
The ABC said Ms Raper asked to be reassigned from State Parliament to general reporting shifts in February 2018 for reasons unrelated to the incident and before media enquiries were received.
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