Just a few weeks ago an ill advised bout of chair sniffing and bra-snapping brought a West Australian MP low.

Now on the other side of Australia, dirty dancing on a green leather sofa, and an alleged simulated sex act with a female colleague have brought the demise of another politician, this time in Sydney.

In the latest sex scandal to hit Australian politics, the police minister of NSW has handed in his resignation after he admitted "unacceptable behaviour" during a drunken Budget night party in his office in Parliament House.

Stephen Brown, who had been promoted only three days earlier, was called into a late night meeting with new NSW Premier Nathan Rees and ordered to tender his resignation.

Witnesses at the party, including MPs and Labour staffers, claimed Mr Brown, 36, dressed only in "very brief" underpants had gyrated to loud techno music on a green leather Chesterfield sofa, then "mounted the chest" of fellow MP Noreen Hay. A witness told The Australian newspaper that he called out to Ms Hay's adult daughter during the performance: "Look at this, I'm tittie-f****ing your mother."

Hours after the allegations emerged, Mr Brown handed his resignation to Mr Rees.

Ms Hay has denied the allegations and claimed that at no time during the party, which happened in June, did she see Mr Brown unclothed. She refused to speak to The Times, but told ABC Radio: "You know there were a number of young women in that room.

"It's ridiculous... I mean I had a dance with Matt Brown, that's true, and there was laughter going on, there were jokes happening, but I think someone has waited three months to take some political licence with this," she said.

However the Premier said that his own investigations revealed that Mr Brown had been in his underwear. "I subsequently put it to the former minister late last night that there had been too many reports of you in your underwear for me to ignore," he told Fairfax Radio

Mr Rees told reporters today that Mr Brown had initially assured him that nothing untoward had happened. "I gave former minister Brown every opportunity to give the truth, the whole truth and nothing but the truth," he said.

However, afterr Mr Rees himself had questioned guests at the party, "additional elements" of the party emerged, he said.

"On the basis that he had been untruthful to me and that my credibility and the government's credibility were on the line, I demanded his resignation," he said.

"He will not be back in my cabinet.''

At a press conference at his constituency in the coastal town of Kiama, Mr Brown, a former solicitor and wealthy landlord, refused to say exactly how he had behaved, but said he "categorically denied" that he had simulated a sex act.

“I'm a human being and I made a mistake and I am going to cop the consequences,” he said.

The scandal has thrown Mr Rees' newly installed government into turmoil only six days after the former rubbish collector took over the helm of the NSW Labour party from former premier Morris Iemma.

It is the latest in a line of scandals to hit Australia politics, many of them centring on the NSW Labour party's Sydney headquarters.

In 2000, a Young Democrats activist alleged that Labour finance minister Joe Tripodi had sexually assaulted her after a party at Parliament House in Sydney's MacQuarie St. Mr Tripodi, a powerful member of the party, claimed the contact was consensual and was cleared of wrongdoing.

In May, former NSW Aboriginal affairs minister Milton Orkopoulos was sentenced to 13 years in jail for child sex and drug charges, with some of the offences occurring in Parliament House

Last month Troy Buswell, leader of the West Australian Liberal party was forced to stand down after he admitted sniffing the chair of a member of staff in 2005 and snapping the bra of a Labour staffer in mid-2007.

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