A COMPANY representing a comedian has apologised to Opposition Leader Tony Abbott and his chief of staff Peta Credlin for what Prime Minister Julia Gillard has described as an "offensive" joke.

A distasteful and offensive joke about Ms Credlin was made at a union dinner in Canberra last night attended by Julia Gillard and senior Cabinet Ministers.

Manic Studios this afternoon said in a statement it unreservedly apologised to Ms Credlin and Mr Abbott for the joke made at the Construction Forestry Mining and Energy Union dinner at Parliament House.

"The joke was a last-minute inclusion and crossed the line," spokesperson Piers Grove said.

"We did not run the joke past anyone. Nobody from the CFMEU or the Labor party or anyone else in attendance at the dinner knew of the joke until it was told.

"The poor reaction the joke received is testament to the fact that we exercised poor judgment.

"We unreservedly apologise to all parties for any offence."

Treasurer Wayne Swan was still present when the joke was made and made a speech after the comedian's performance.

"The comedian’s comments were clearly very inappropriate and offensive. There’s no place for those kinds of comments and I made that clear to the union this morning," Mr Swan said.

The PM this morning called the union and expressed her anger at the joke.

“I was not in attendance when these remarks were made at the CFMEU dinner last night but I did hear this morning that offensive remarks had been made and let me be very clear, reports to me the remarks were made are deeply offensive, they’re wrong," she said.

"The comments should never have been made.

"It was wrong for them to have been made and offensive for them to have been made.

"In those circumstances as soon as I possibly could I rang the national secretary of the CFMEU and indicated I thought these comments were offensive.

"I understand the CFMEU has put out a statement in relation to this matter but clearly there is no place for offensive comments of this nature.”

The joke delivered by a comedian known as Fair Go For Billionaires, hired by the CFMEU, contained lewd and offensive references to Ms Credlin. Offensive remarks were also made about Mr Abbott.

The Prime Minister and senior Ministers had left the function, held in Canberra, before the joke was made.

However, several Labor MPs were believed to be still in attendance.

"It was very distasteful,'' said one Labor source present.

"No one was happy about it.''

A senior Government source said the PM had already left the dinner before the comedian began.

According to another source a "silence'' descended over the room when the joke was made.

The CFMEU this morning distanced itself from the comedian, with a senior official saying he was "horrified'.

"We did not know what he was going to say, had we known we would have pulled him of stage."

"Its not the form of our union...and it’s not something we would tolerate.''

See the CFMEU's Fair Go For Billionaires ad campaign.

Originally published as Crude joke about Abbott staffer