From the moment talk first surfaced that Luke Foley had allegedly assaulted a female journalist at a Christmas party, he has denied any wrongdoing.

Yesterday was no different.

While Mr Foley quit as NSW opposition leader, he described an ABC journalist's statement that he put his hand inside her underpants as "false".

Key points: By denying the allegations, Luke Foley may have become a political outsider

By denying the allegations, Luke Foley may have become a political outsider He could be expelled from the party for bringing it into disrepute

He could be expelled from the party for bringing it into disrepute Labor could still win the March state election if current deputy Michael Daley is elected leader

Mr Foley announced he will be taking legal action and indicated he wished to remain as the member for Auburn.

But even with the denial, the Labor Party — which has known plenty of scandals in NSW — is distancing itself from Mr Foley.

The party will not be paying his legal fees for his defamation case and senior Labor sources have told the ABC they have major reservations about him running for his seat of Auburn.

Mr Foley may have denied the allegations, but by doing so he may have also become a political outsider.

Caucus is likely to pick current deputy leader Michael Daley, with Shadow Minister for Planning, Environment and Heritage Penny Sharpe as deputy.

What are Labor's election chances now?

The last thing Labor needs is a major defamation case by Mr Foley hanging over its head, with a state election looming in March.

Mr Foley took over the leadership just three months before the 2015 election, and Labor still managed to gain a 13 per cent swing.

So there's still hope that if Mr Daley is elected leader this weekend that the party can move forward and may be able to stay neck and neck with the Liberal Party in the polls.

At this point, that possibility seems a long way off.

One thing many members agree on is the misuse of parliamentary privilege.

Liberal MP David Elliott mentioned the matter — without naming the journalist Ashleigh Raper — in the bear pit last month.

But what gives one minister the right to put a woman's story into the public domain?

As acting Opposition spokeswoman for women Jenny Aitchison said, the move took away any control Ms Raper had as to what happens next.

"And it's the exact reason why women don't want to come forward," she said.

But Ms Raper summed it up best in her statement.

"Situations like mine should not be discussed in Parliament for the sake of political point scoring."

A comment all politicians would be mindful to think about.