Minutes after Senator Sinodinos stepped aside, Prime Minister Tony Abbott rose at the beginning of the House of Representatives question time to say Senator Sinodinos had done the "right and decent thing". Prime Minister told Parliament that Senator Sinodonis had done the "right and decent thing" by stepping aside. Credit:Alex Ellinghausen Mr Abbott said that Senator Sinodinos had informed him earlier on Wednesday of his "decision to step aside for the good of the government". He said Senator Sinodinos would "draw no ministerial salary and have no access to ministerial entitlements", but insisted that the senator had stood aside and not resigned. "Senator Sinodinos has done the right and decent thing as you'd expect and for someone who has given our country such long and faithful service," Mr Abbott said.

"I look forward to his restoration to the ministry." Former PM John Howard, pictured with Arthur Sinodinos in 2006, has released a statement in support for his former chief of staff. Credit:Andrew Taylor The Prime Minister ducked sustained questioning from Opposition Leader Bill Shorten about the extent to which he had discussed Senator Sinodinos' involvement with AWH with the senator. "It's not my job to provide a running commentary on private conversations," Mr Abbott said. Assistant Treasurer senator Arthur Sinodinos during Senate question time on Tuesday. Credit:Andrew Meares

Senator Sinodinos said he did not want his corruption inquiry to become a "sideshow" to the important work being undertaken by his colleagues. "I rise to make a statement in regard to the current inquiry into Australian Water Holding Propriety Limited by the independent commission against corruption in NSW," he said. "I’ve been called as a witness to the ICAC and as I’ve said on the public record on numerous occasions, I’ll be co-operating with the inquiry. "I do not want this sideshow to be an unnecessary distraction to important work of the government which I am proud to serve. "Whilst this process is under way I will therefore be standing aside as Assistant Treasurer."

Senator Sinodinos said he thanked his colleagues for their "strong support and for their faith, their ongoing faith in my integrity". "The ICAC is an important forum," he added, "the appropriate forum for me to answer any questions in relation to this matter." Finance Minister Mathias Cormann will replace Senator Sinadinos as Assistant Treasurer while the investigation continues. The ICAC inquiry heard on Monday that Senator Sinodinos, then NSW treasurer of the Liberal Party, was installed on the board of the Obeid-linked AWH in 2008 "to open lines of communication with the Liberal Party". It heard that Senator Sinodinos, who was earning $200,000 a year for "a couple of week's work", stood to enjoy a "$10 or $20 million payday" if AWH had won a lucrative contract with the NSW government.

Senator Sinodinos was chief of staff to former prime minister John Howard from 1997 to 2006. Earlier on Wednesday, shadow treasurer Chris Bowen called on Senator Sinodinos to appear before the Senate to explain himself. "If he can't do that then he should stand aside," Mr Bowen told Sky News. "And if he won't stand aside the Prime Minister should show some leadership and stand him aside this morning." Shortly after midday, with support from Labor and the Greens, the Senate voted to ask Senator Sinodinos to come into the chamber and make a statement about his dealings with AWH. Labor had set a deadline of midday during the preceding debate, and government senators quickly protested that the Assistant Treasurer had not been given the opportunity to comply.

As recently as this morning, Senator Sinodinos' colleagues rejected calls for him to step aside. Senior Liberal MP Josh Frydenberg suggested that he and his colleagues were willing to withstand considerable political damage to defend the Assistant Treasurer. ''If I was in the trenches, the one person you would want next to you would be Arthur Sinodinos,'' Mr Frydenberg said. ''And now we're going to be in the trenches with him.'' Asked how Senator Sinodinos was coping with the pressure, Mr Frydenberg said: ''As you know Arthur Sinodinos has been around politics for a very long time, including as a distinguished chief of staff to the prime minister. ''[Sinodinos] has dealt with some difficult times and he always gets through.

''So I have no doubt that he's coping very well in these circumstances.'' On Wednesday former prime minister John Howard threw his support behind Senator Sinodinos, calling his former chief of staff "a man of great integrity and ability". "I continue to hold him in the highest regard," Mr Howard said. Loading On Tuesday, Mr Abbott said the Assistant Treasurer had his full confidence.