Luke Foley has resigned as NSW Labor leader, just hours after an ABC journalist detailed explosive sexual harassment allegations against him.

Mr Foley is accused of inappropriately touching reporter Ashleigh Raper at a Christmas Party in 2016.

Ms Raper issued a statement on Thursday afternoon, detailing the claims in public for the first time.

“He stood next to me. He put his hand through a gap in the back of my dress and inside my underpants,” she said.

“He rested his hand on my buttocks. I completely froze.”

Mr Foley has consistently denied any wrongdoing and threatened Liberal Minister David Elliott when he brought the allegations up in parliament.

Following Ms Raper’s statement, the NSW Labor leader came under increasing pressure to step down – with a Labor MP saying they’d call a leadership spill if he didn’t.

Mr Foley fronted the media at 5:30pm to announce his resignation as NSW Labor leader, effective immediately.

But he’s maintaining his innocence and says the allegations made against him are false.

“I’ve retained solicitors and senior counsel to advise on the immediate commencement of defamation processings,” he said.

“However, I can’t fight to clear my name and fight an election at the same time.”

He says he’ll remain as the Member for Auburn and will return to the backbench.