Luke Foley has resigned as NSW Labor leader.
- ABC journalist Ashleigh Raper said she did not want to make the statement
- Foley subsequently resigned, but said he intended to "clear his name"
- ABC understands Labor MPs backing Michael Daley to replace him
Mr Foley said he had retained solicitors to commence defamation proceedings after an ABC journalist released a statement detailing how he put his hand down her dress at a Christmas party in 2016.
"The first thing I'd like to say is that the allegations against me today, made public by the ABC, are false," Mr Foley said.
"I've retained solicitors and senior counsel to advise on the immediate commencement of defamation proceedings in the Federal Court of Australia."
Mr Foley said he would remain as the Member for Auburn and move to the backbench.
"I can't fight to clear my name and fight an election at the same time. It's just not possible to do both," Mr Foley said.
"This will enable a new leader to give his or her full attention to the task of defeating the Liberal National Government."
Mr Foley did not take questions during his brief media conference.
ABC news director Gaven Morris backed Ms Raper.
"Ashleigh Raper is a strong and honest person," he posted on Twitter.
"The ABC stands by this statement."
The ABC understands MPs are mobilising behind Michael Daley to become the next leader of the Labor Party and that he would overwhelmingly have the numbers for the top job.
Discussions for his deputy are now centring on the Left's Penny Sharpe, but other names previously mentioned are Jo Haylen and Yasmin Catley.
'I completely froze'
Ms Raper released a statement earlier today, detailing Mr Foley's behaviour towards her at a Christmas function in 2016.
"He stood next to me," she said.
"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 the incident was witnessed by Sean Nicholls, who was then the state political editor at the Sydney Morning Herald and is now an ABC journalist.
"As shaken as I was, I decided not to take any action and asked Sean to keep the events in the strictest confidence," she said.
"He has honoured that."
Ms Raper said in the statement that she felt compelled to speak out due to the "escalation of the public debate, including in state and federal parliament, despite my expressed wish to neither comment nor complain".
She also decided to speak out after Mr Foley called her to apologise, telling her "I'm not a philanderer, I'm not a grouper, I'm just a drunk idiot".
A NSW Police spokeswoman said there had been no complaint received about the matter.
"NSW Police have however spoken to senior management at the ABC," the spokeswoman said in a statement.
"If a complaint is received, the matter will be taken seriously and will be thoroughly investigated by detectives as would any allegation of this nature."
Mr Foley had denied any wrongdoing since the matter was first raised in Parliament last month by Liberal MP David Elliot.
"Mr Elliot should come out of the coward's castle, walk 10 metres outside and, you know, if he said that again I'd sue him," he said at the time.
"Of course it's not appropriate to misuse parliamentary privilege to smear people without a skerrick of evidence."