NSW Premier Kristina Keneally is grappling with her first ministerial scandal after Transport Minister David Campbell resigned over claims he used a government car to visit a gay sex club in Sydney.
The Seven Network on Thursday night aired footage of the married Mr Campbell allegedly visiting the self-described intimate sex haunt in the city's east.
According to Seven, the 52-year-old Mr Campbell visited Ken's at Kensington on Anzac Parade, in Ms Keneally's state electorate of Heffron, on Tuesday night for about two hours.
The television report showed footage of Mr Campbell, wearing a white business shirt and dark trousers but no jacket, leaving a venue and heading into a dark street.
The MP is alleged to have used a taxpayer-funded government car to drive himself to and from the club, after giving his driver the night off.
Less than half an hour before the Seven report aired at 6pm (AEST), and before going to ground, Mr Campbell issued a brief statement saying he had handed his resignation to Ms Keneally.
The father to two adult sons did not directly address the allegations nor detail his reasons for resigning.
"I have resigned as minister for transport and roads for personal reasons, not for any reasons relating to my ministerial duties," he said in a statement.
"I apologise to my wife, family, colleagues, staff and the community for letting them down.
"This will be a very difficult time for my family and friends, and I ask for their privacy to be respected."
According to the entertainment guide Time Out Sydney, the gay sauna club has been "servicing queer Sydney's sexual appetites for more than 25 years".
A Ken's of Kensington spokesman declined to comment, telling AAP: "You have to call the office in the morning".
In accepting Mr Campbell's resignation, Ms Keneally said the South Coast MP had carried out his ministerial duties with dedication and success.
"I accepted his resignation on compassionate grounds as he clearly wants time to work through this difficult period with his family," Ms Keneally said in a statement late on Thursday night.
"I appeal to the community to show understanding towards David and his family at this time."
The premier also announced a major cabinet reshuffle the wake of the shock resignation.
Former unionist John Robertson takes on Transport while David Borger adds roads to his Western Sydney portfolio.
Paul Lynch and Peter Primrose also picked up new portfolios, while Maitland MP Frank Terenzini was elevated to the ministry with the Housing and Small Business briefs.
The allegations involving Mr Campbell are the latest in a series of scandals to plague the 15-year-old Labor government and claim major scalps - of John Della Bosca, Carl Scully and Milton Orkopoulos, to name a few.
Mr Campbell had for months been under pressure to resign over a spate of perceived bungles, most recently for his handling of a traffic accident on the F3 north of Sydney which left motorists stranded for hours.
The opposition has also called for him to stand down over the tens of millions of dollars wasted on the scrapped CBD Metro plan.
A spokesman for Opposition Leader Barry O'Farrell said the coalition would not comment on Mr Campbell's resignation, as it did not relate to any political or ministerial indiscretion.
Greens MP and transport spokeswoman Lee Rhiannon said the "spotlight should not be on David Campbell's personal life".
"But on his botched record as a minister who has failed to deliver much-needed public transport infrastructure for NSW," she said.
Rail Tram and Bus Union NSW secretary Alex Claassens said Mr Campbell had been good-intentioned as transport minister, but "too many important projects have been delayed, deferred or dismissed".
"The challenge for any new minister will be to get things moving," he said.
In his statement, Mr Campbell said he would remain in parliament as the member for Keira, on the state's South Coast.
Prior to moving into state politics in 1999 Mr Campbell served for eight years as the mayor of Wollongong.
