Fallen NSW Premier Barry O'Farrell with Prime Minister Tony Abbott.

Tony Abbott is scrambling to inoculate his Government from further fallout of a corruption probe that has claimed NSW Premier Barry O'Farrell's scalp and has put Arthur Sinodinos' ministerial future in doubt.

As the Prime Minister commended his friend Mr O'Farrell yesterday for doing the "honourable" thing in resigning, documents emerged showing the company at the centre of a corruption hearing paid $2650 for two employees to attend a Liberal Party dinner with Mr Abbott in 2010.

In the Independent Commission Against Corruption hearing established to expose Labor corruption, a $3000 bottle of Penfolds Grange ended Mr O'Farrell's political career yesterday.

The Premier had been due to appear with the PM to announce a multibillion-dollar Sydney roads project but instead held a snap press call to fall on his sword for a "massive memory fail".

On Tuesday, Mr O'Farrell appeared before ICAC and emphatically denied receiving a bottle of 1959 Grange from the-then chief executive of Australian Water Holdings Nick Di Girolamo, who is accused of corruptly billing taxpayers for company expenses, political donations and extravagant executive salaries.

Mr O'Farrell told ICAC that he would have remembered being delivered a bottle of Grange, "particularly one that was my birth year", nor did he recall a half-minute call he made to Mr Di Girolamo the same night he is believed to have received the wine.

Mr Di Girolamo had told ICAC the Premier called to thank him for the gift.

The Premier's position became untenable when ICAC revealed it had a thankyou note to Mr Di Girolamo from the Premier.

"We wanted to thank you for your kind note and the wonderful wine. 1959 was a good year, even if it is getting even further away! Kind regards, Baz + Rosemary," Mr O'Farrell wrote.

Mr O'Farrell yesterday said the note had not jogged his memory.

"I've accepted that I've had a massive memory fail. I still can't explain either the arrival of a gift that I have no recollection of or its absence, which I certainly still can't fathom, but I accept the consequences in an orderly way," he said.

Mr O'Farrell is the second NSW premier to come unstuck by ICAC. Liberal Nick Greiner when premier established the watchdog but had to resign because of an adverse ICAC finding, later overturned in court.

Mr Abbott said Mr O'Farrell had "innocently, inadvertently misled ICAC yesterday and he has taken the utterly honourable step of resigning as Premier".

Senior Liberals said the PM's comments may serve to put greater pressure on Senator Sinodinos to resign as Assistant Treasurer.

Last month, Mr Abbott told the Senate he had "not met with Mr Nick Di Girolamo" but yesterday he had changed his language, saying: "I don't for a moment say I have never met him, but I have no recollection of it."

The West Australian

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