Defence Minister Linda Reynolds has apologised to alleged rape victim Brittany Higgins after reportedly calling her a "lying cow".
In a statement released on Friday, Ms Reynolds revealed discussions were underway with Ms Higgins' lawyers to settle the matter after legal action was taken over the remarks.
Prior to its settlement, Ms Reynolds said she wished to apologise to Ms Higgins.
"I want to express how deeply sorry I am for these remarks and for any hurt and distress they have caused," she said.
Former Liberal staffer Ms Higgins alleges she was sexually assaulted by a fellow ministerial adviser in Senator Reynolds' office in 2019.
Ms Reynolds reiterated she has never questioned Ms Higgins' account.
She said in an earlier statement that her comments were instead aimed at certain aspects of the circumstances surrounding Ms Higgins' account.
Ms Higgins' lawyers said the ex-staffer was appalled Ms Reynolds apologised to staff who heard the remark but not her.
"Self-evidently, this demeaning and belittling statement, in which you refer to our client as a member of the animal kingdom and declare her to be untruthful, is highly defamatory of our client's good character and unblemished reputation," the letter said.
Senior cabinet ministers defend Reynolds
Leader of the government in the Senate, Simon Birmingham, announced on Friday a review into parliamentary workplaces, led by Australia's Sex Discrimination Commissioner, Kate Jenkins.
He joined Home Affairs Minister Peter Dutton in defending Ms Reynolds' decision not to resign.
"Minister Reynolds has made it very clear that she's sorry for the statements that were reportedly made," he said.
In the wake of Ms Reynold's apology, Labor leader Anthony Albanese told reporters her statement "doesn't cut the mustard".
He called for her resignation.
However just moments later, Prime Minister Scott Morrison addressed reporters and said Ms Reynolds "maintains my confidence".
"This was a comment made not in a public place. This was a comment made during a period which was very traumatic and very stressful. The minister deeply regrets saying these things and has offered an apology, as she should," he said.
Review can 'give confidence'
Ms Jenkins will receive scope to hear confidentially from former and serving staff and politicians on how to make cultural changes to prevent assault, harassment and bullying.
"It is so important to get this work done and to get it done properly," Mr Birmingham said.
"It's important for the victims of bullying, sexual harassment and sexual assault."
The commissioner, who contributed to the terms of the inquiry, is due to hand down her final report in November after making interim findings public in July.
Senator Birmingham said the events of the past few weeks made him concerned good people would be deterred from entering politics unless changes were made.
"If we can set that example and be an exemplar for the nation, then hopefully that can give people the confidence to step forward and to work in our parliament," he said.
Ms Higgins has reinstated her formal police complaint and believes parliament should be the safest building in Australia.
Do you have a story tip? Email: firstname.lastname@example.org.