The New South Wales Premier has given his Finance Minister, Greg Pearce, a stern warning over allegations he had to be sent home from parliament because he was drunk.

In the early hours of Thursday morning, as other Upper House MPs sat through a marathon debate on victims of crime compensation laws, Mr Pearce was given a pair and allowed to leave.

The official reason given was that he was unwell, but Upper House sources say he had been seen drinking at a Liberal Party fundraiser at parliament and appeared to be too drunk to continue.

Premier Barry O'Farrell, who is overseas, has released a statement saying Mr Pearce has been warned about his behaviour.

"I have spoken with Mr Pearce from Hong Kong this afternoon and conveyed to him this sort of behaviour won't be tolerated," Mr O'Farrell said.

"Politicians are expected to meet community expectations, including in the workplace.

"I've made it clear to Mr Pearce if this behaviour is repeated, he won't part of my team."

Greens MP John Kaye says there needs to be a review of alcohol policies for all MPs on sitting nights.

Sorry, this video has expired Premier Barry O'Farrell threatens to sack Finance Minister Greg Pearce for being drunk in Parliament ( Brigid Glanville )

"If any MP turns up to parliament and can't do their job because of consumption of alcohol then they deserve to be reprimanded," he said.

"There are serious questions about what happens when MPs have drinks and then go back into parliament, particularly when we have a late night sitting.

"It's time to look at that comprehensively, to work out an alcohol policy that respects the people of New South Wales and their desire to have laws made by people who are 100 per cent sober."