Former NSW Labor MP Paul O'Grady thought there must have been a sub-editing mistake when he read a newspaper report in which Eddie Obeid claimed Ian Macdonald had never been into Mr Obeid's office.

Mr O'Grady, who was a member of the Upper House from 1988 to 1996, told the Independent Commission again Corruption on Monday that he was "incredulous" when he read a report in the Daily Telegraph last week where Mr Obeid had told ICAC that controversial former minister Ian Macdonald had "never been in my office in 20 years of me being in politics."

Eddie Obeid: claims Ian Macdonald was never in his office. Credit:Kate Geraghty

Mr O'Grady, who had the office next door to Mr Obeid, said he saw Mr Macdonald "coming and going back and forth all the time."

When he read the article he thought there may have been a mistake because "the sub-editing went to New Zealand". After checking with the journalist that the statement attributed to Mr Obeid was accurate, Mr