PREMIER Kristina Keneally has not ruled out David Campbell returning to the ministry after he has dealt with the consequences of a gay sex club scandal and 20 years living a secret life.

Mr Campbell, 52, tendered his shock resignation last night after revelations he had used his ministerial car to visit Ken's of Kensington, a gay sauna, in Sydney's eastern suburbs on Tuesday night.

Ms Keneally said she was shocked, saddened and disappointed by Mr Campbell's resignation as transport and roads minister, and the way in which his sexuality had been exposed by Channel 7.

"It's a resignation I accepted on compassionate grounds,'' she said today.

"Clearly he needs time for himself and his family to work through what is unquestionably a very difficult time for him personally, and for his family.

"I would say speaking as a person and a premier, I was shocked, I was saddened. I'm distressed as his friend, I was disappointed and angry as a premier.

"I am as a woman concerned for his family and his wife in particular. I can not imagine the impact this is having, particularly on his family and on him at this time.''

Ms Keneally said she was disappointed to lose the hard-working minister and father of two sons and wouldn't rule out his return in the future, in the aftermath of what she described as a "very human tragedy''.

"I said that to David last night,'' she said.

On numerous occasions during a half-hour press conference, Ms Keneally questioned whether revelations about Mr Campbell's sexuality, or claims he had been visiting the sex club, were in the public interest.

"I think there will be debate about whether or not a person's sexuality has any bearing on their role as a member of parliament, as a minister, or on their job performance,'' she said.

"David has been living with this secret for over two decades.

"I think it is appalling that he kept this secret, particularly from his family and his colleagues.

"I also think it is appalling that we live in a society that he had to keep this secret.''

Speaking for the first time since footage of him leaving the gay sex club was aired on TV, Mr Campbell said he accepted responsibility for his actions.

"What I will do is work through these issues with my family,'' he said.

The Seven Network defended its story.

"Isn't it part of our duty to let the electorate know when a minister has let them down?'' director of news Peter Meakin told the ABC.

The premier denied reports that Mr Campbell's double life was common knowledge in cabinet.

Asked if she could guarantee she hadn't heard any rumours about Mr Campbell's sexuality, she repeated three times: "Absolutely.''

Ms Keneally stressed ministers are allowed to use their taxpayer-funded ministerial cars for personal use.

Even so, she said Mr Campbell had perhaps shown a "lack of judgment''.

Ms Keneally said Mr Campbell was coping "as well as could be expected in the circumstances'' and she supported his decision to stay on as the member for member for Keira.

She denied allegations Mr Campbell's personal life could have been used to blackmail him while he was police minister in 2007 and 2008.

Asked if Mr Campbell's situation would affect Labor's chances at the state election to be held in March 2011, she said: "Every election is winnable, and every election is losable''.

