Prime Minister Scott Morrison has intensified his criticism of embattled Defence Minister Linda Reynolds, blasting her "disgraceful slur" against an alleged rape victim.
Senator Reynolds will have to pay compensation to former Liberal staffer Brittany Higgins after making a defamation settlement for calling her a "lying cow".
The minister, who is on extended medical leave, apologised and retracted the remark which was leaked from her office.
In his strongest comments yet, Mr Morrison said he was pleased the "disgraceful slur" had been withdrawn.
"Of course she should never have said it," he told parliament on Monday.
But the prime minister challenged Labor MPs to provide transcripts of what was said in their offices before being in a position to "cast stones".
"This was a statement that should never have been uttered, whether in a private office or elsewhere," Mr Morrison said.
Ms Higgins says she was raped at Parliament House by a colleague in 2019 when she was working for Senator Reynolds.
The minister has argued she made the comment in response to suggestions she didn't offer her former employee enough support at the time of the alleged incident.
Ms Higgins will donate the undisclosed sum to sexual abuse survivors counselling and support in Canberra.
The prime minister has defended keeping Senator Reynolds in the defence portfolio despite growing calls for her to be sacked.
Ms Higgins addressed a major protest outside parliament on Monday, accusing Mr Morrison's staff of undermining and discrediting her loved ones at the same time he was publicly apologising.
The prime minister insisted he had no knowledge of those claims.
"I would never instruct such a thing. I would never do that," he said.
"The apology offered to Brittany Higgins in this place was sincere and was genuine. I'm happy to restate it."