The NSW police are investigating conflicting claims over what transpired at Iguanas Waterfront Bar in Gosford last Friday night in an incident involving Mr Della Bosca and his wife, Federal Labor MP Belinda Neal.

"Earlier this week, I accepted the statement of the minister and the apology he received from the establishment,'' Mr Iemma said.

"Mr Della Bosca should have disclosed to me at that time the exact nature of his involvment in negotiating the terms of the apology.

"Anyone offering a retraction has the right to seek certain content.

"In the interests of public accountability, the exchange of documents should have been acknowledged. The minister agrees with this.''

At the club, Ms Neal is accused of aggressive behaviour, including threatening the club with the loss of its liquor licence, claims she has denied, even though several staff members have signed statutory declarations confirming their version of events.

Della Bosca's position had become untenable today, after a Herald report this morning that Mr Della Bosca had written the apology for the club to sign, even though his office had denied that he had done so.

The club issued an apology to Mr Della Bosca clearing him and his wife of any wrongdoing at the nightclub last Friday.

While Mr Della Bosca has stood aside, Mr Iemma said that the Attorney General John Hatzistergos will assume the education portfolio while the Roads Minister Eric Roozendaal will take over the industrial relations portfolio.