'I'm Resigning': Luke Foley Quits But Denies Groping Allegations

NSW Labor leader Luke Foley has quit in the wake of bombshell allegations he groped an ABC journalist at a bar in 2016, but maintains the claims are false.

He said he would be commencing defamation proceedings in federal court, but said it was "not possible" to take legal action and fight an election at the same time.

In a brief statement to journalists on Thursday afternoon, Foley said:

"The first thing I'd like to say is the allegations against me today made public by the ABC are false. I've retained solicitors and senior counsel to advise of the immediate commencement of defamation proceedings in the federal court of Australia."

But he said he would stand down from the Labor leadership and return to the backbench instead.

"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. Therefore I'm resigning the leadership of the Labor party effective today," he said.

"This will enable the new leader to give his or her full attention to the task of defeating the Liberal National government. I'll be remaining as the member for auburn and returning to the backbench."

Foley's resignation came just hours after the ABC released a statement levelling explosive claims the Member for Auburn had  put his hand inside the dress and underpants of a journalist at a Christmas party in Sydney.

Through the ABC statement, state political reporter Ashleigh Raper accused the opposition leader of behaving inappropriately at a parliamentary Christmas party in November 2016.

READ MORE: 'I Want It To Stop': ABC Journalist's Damning Allegations Against Luke Foley

"He stood next to me. He put his hand through a gap in the back of my dress and inside my underpants," Raper wrote in a statement provided by the ABC.

"He rested his hand on my buttocks."

Foley stood down from the leadership but said the allegations were not true.

Just hours earlier, Foley had told ABC radio he would not be resigning and spoke of optimism that he would be premier of NSW.

Shadow planning minister Michael Daley is tipped as the man to take over from Foley.

Corrections Minister David Elliott first made the allegation involving Foley and a then-unnamed ABC reporter in mid-October under parliamentary privilege. Foley angrily denied the claims and goaded Elliott, asking him to repeat the allegations outside the legal protections of the chamber.

Foley was in line to become the next state premier, with a September poll showing his Labor party was neck-and-neck with the Liberal government.

Senior ABC journalists including Emma Alberici, Patricia Karvelas, Leigh Sales, Jo Puccini, Barrie Cassidy, Annabel Crabb and Elise Worthington, as well as former ABC political editor Chris Uhlmann, have commented on the news and sent support to Raper.

Thursday's resignation caps off a chequered three years for Foley as opposition leader, with criticisms of weak leadership and caving in on populist policies.

Foley ascended to the opposition leader position in January 2015, and led Labor to a state election just two months later. After a disastrous 2011 election, where Labor won just 20 seats, Foley's Labor flipped 14 state seats, and increased its primary vote by 8.5 points in 2015.

He notably came under fire for his 2018 comments about "white flight", claiming white Anglo-Saxon people from Sydney's western suburbs were being forced from the area due to an influx of non-European immigrants.

He was roundly criticised by many, with One Nation leader Pauline Hanson a rare supporter of the claims. Foley was forced to apologise for the rhetoric.

"I won't use the term again, some people find it offensive," he said.