NSW Labor's Luke Foley will not fight to retain the seat of Auburn, with allegations he groped an ABC journalist pushing senior MPs to publicly disavow their former leader.
Two candidates emerged to heal and lead the party on Friday while the NSW premier rounded on her own minister, David Elliott, for his role in airing the accusations without the woman's consent.
Mr Foley announced on Thursday he would resign as leader and sit on the backbench after journalist Ashleigh Raper alleged he put his hand in her underwear at a 2016 Christmas Party.
The outgoing leader said he would fight to clear his name and launch defamation proceedings in the Federal Court of Australia, a move that disappointed senior colleagues.
His deputy Michael Daley and Labor's highest-ranking female MP Jodi McKay on Friday threw their support behind Ms Raper.
Mr Daley said Ms Raper "did the right thing" in coming forward even though Mr Foley had repeatedly and strongly denied the claims.
"She's a credible person and I believe her," he told reporters in Sydney.
"Ashleigh Raper did not deserve to be treated that way."
But on Friday evening, as the party considered moves to disendorse him, Mr Foley wrote to its general secretary saying he would not seek re-election.
"The Party must focus on the election which is at hand. I do not want to be a distraction," his letter reads.
"I will continue to work for the people of my electorate as Member for Auburn until the election."
The party quickly accepted the resignation of the man who, just a day earlier, said he expected to be premier in 2019.
Mr Daley said he believed nothing good would come of Mr Foley's foreshadowed legal action.
"It will be damaging for everyone, particularly for Ashleigh Raper," he said.
"I think Luke should carefully reconsider whether he wants to take those legal proceedings or not."
Ms McKay echoed the sentiments and urged Mr Foley to undertake "serious consideration".
Labor Member for Kogarah, Chris Minns, also announced a tilt at the leadership but is considered an outside chance without the endorsement of party headquarters.
The party is expected to meet at 2pm on Saturday and name Mr Daley as leader.
The allegations against Mr Foley emerged after Liberal MP David Elliott raised the matter under parliamentary privilege in October.
Mr Elliott released a short statement on Friday following heavy criticism of his role in the scandal.
"This has clearly been a difficult time for the journalist," he said.
"I have long held concerns over the character of the alternate premier. To that end, it was never my intent to cause distress for the journalist."
Ms Berejiklian said she was disappointed control of the story was taken by Mr Elliott out of the hands of the Ms Raper.
"I've expressed my absolute disappointment that her ability to control the issue, as she wanted to, was taken away from her," Ms Berejiklian told reporters in Sydney.
Police have told ABC management they will investigate should Ms Raper make a complaint.