Premier Barry O'Farrell has resigned after a corruption inquiry obtained a handwritten note that contradicted his claims he did not receive a $3000 bottle of wine from the head of a company linked to the Obeid family.

On Tuesday, the Independent Commission Against Corruption heard that Mr O'Farrell was sent the Penfolds Grange Hermitage by Nick Di Girolamo as a congratulatory gift following his March 2011 election victory.

Mr Di Girolamo, a Liberal Party fund-raiser and key player in the ICAC's inquiry into Obeid-linked company Australian Water Holdings, told the inquiry yesterday he had the wine couriered to Mr O'Farrell's home at Roseville and later received a thank-you call from him.

But under oath Mr O'Farrell denied ever receiving the wine or making the call. This was despite telephone records showing Mr O'Farrell called Mr Di Girolamo at 9.30pm on the day the wine was purchased.

In a statement today, Mr O'Farrell said: "I've been advised overnight that this morning at ICAC a thank-you note from me in relation to the bottle of wine will be presented.

"I still can't recall the receipt of a gift of a bottle of 1959 Grange, I can't explain what happened to that bottle of wine.

"But I do accept that there is a thank-you note signed by me and, as someone who believes in accountability, in responsibility, I accept the consequences of my action.

"The evidence I gave to the independent commission against corruption yesterday was evidence to the best of my knowledge.

"I believe it to be truthful and as I said yesterday it's important that citizens deal with police, deal with the courts and deal with watchdogs like ICAC in a truthful fashion.

"In no way did I seek to mislead, wilfully or otherwise, the Independent Commission Against Corruption. But this has clearly been a significant memory fail on my part, albeit within weeks of coming to office, but I accept the consequences of my actions.

"And that is that, as soon as I can organise a meeting of the parliamentary Liberal Party for next week, I will be resigning the position and enabling a new Liberal leader to be elected, someone who will then become the Premier of NSW."

Note tendered today: ICAC

ICAC revealed that the note was tendered at 9.17am today and that Mr Di Girolamo's barrister was the source.

An irate counsel assisting the ICAC, Geoffrey Watson, SC, defended ICAC against the suggestion that it was "sitting on" the thank-you card from O'Farrell.

"I just want to correct something. I've been informed while I've been sitting here that there is some suggestion being made that ICAC had access to that information relating to Mr O'Farrell, the card, and sat on it, held it back until Mr O'Farrell gave his evidence," Mr Watson said.

"If it is being said, it's false, it shouldn't be said and quite frankly - and I think I probably speak on behalf of everybody at ICAC - I resent it if it is being said.

"I can tell whoever wants to know in the world ICAC acquired the information at 9.17am this morning."

Di Girolamo said: "I would resent that too, commissioner."

Commissioner Megan Latham said: "I can also verify that the email to ICAC came on to my desk at 9.20am this morning and that it was sent through partly I think from Mr Alexis [Mr Di Girolamo's barrister, Todd Alexis, SC] to Mr Watson as I understand it at that time and prior to that time no one had any knowledge that that document even existed."

Mr Watson said the commission's investigators have already spoken to the courier driver who delivered the $3000 bottle of Grange to Mr O'Farrell's then home at Roseville.

"This is not surprising - he has no independent recollection," Mr Watson said.

But he tendered a three-page document from the courier company, Direct Couriers, which shows the wine was picked up from Australian Water's offices at 3.38 pm on April 20, 2011 and delivered to Mr O'Farrell's home at 4.31 pm.

It was "left as directed at the front of the door," Mr Watson said.

O'Farrell in the box

Mr O'Farrell then gave evidence.

Mr Watson asked him about a phone call the latter made to Mr Di Girolamo at 9.30pm on April 20, 2011 - the day the Grange was delivered to Mr O'Farrell's then home at Roseville.

He showed Mr O'Farrell records from the courier company that delivered the wine.

"It seems from records that it was left on the porch, probably left in the evening of 20 April by the looks of it, which means there's now a very good chance that the call that was made at 9.30pm that evening must have been a thank-you call. Don't you agree?" Mr Watson said.

"I stand by the evidence I gave yesterday, Mr Watson, which is I don't know about that call. I now accept that my recollection yesterday when I said that I had no memory of receiving such a bottle of wine is mistaken, but, Mr Watson, my frustration today is having seen the note, having seen what would on any other occasion would have been a very good memory jog, that has not done the case," Mr O'Farrell replied.

"I would make the point that this happened within two and a half weeks or so of coming to office. I said yesterday in response to a question from my counsel that that's an interesting and extraordinary circumstance. You come out of a campaign, into government. For almost a week the Deputy Premier and I were ministers for all of NSW, we had to put together a ministry, we had to deal with the volume of work that victory brings ... we had to deal with the administrative matters of government, we had some issues within my family where my father-in-law passed away at that time after a car accident, having fallen ill on election night.

"All of those issues, but none of that retracts from the fact that I am sorry, commissioner, that information that I gave to this commission yesterday has proven to be inaccurate. It is a matter that I deeply regret, as someone who has always defended this institution."

Watson: Mr O'Farrell, I'll show you the originals of the documents that were recovered overnight and I'll just ask you to have a look at them and just confirm it is your handwriting. Is that right?

O'Farrell: Yes.

Watson: Well Mr O'Farrell, it's in a pretty sad position that we are now. I've got to ask you: why should the people of NSW, why should they not think that you didn't give honest evidence yesterday, Mr O'Farrell?

O'Farrell: Well I certainly tried to give accurate evidence to the best of my recollection. Can I say, counsel, that in the days since I've been back from China when this matter was first raised with me by my counsel, it went from boxes of wine, to box of wine, to yesterday a bottle of wine. It went from a date that was allegedly in June, to May, then April, back to May, then yesterday to the 20th of April. I gave this matter thought. I considered what I'd been doing and I gave yesterday my best recollection of that which clearly was mistaken and Commissioner, I certainly regret that.

Mr O'Farrell said that "as a strong supporter of this commission, I've always urged people to come forward fearlessly, frankly and give honest evidence, and that's what I believed I was doing yesterday".

"But the regret for me, counsel, is having seen the letter, having seen the envelope, it still does not spark a recollection. Can I just have 60 seconds more? When the issue around Easter was raised with me by your counsel because you'd narrowed down your dates I looked at my diary and, you know, if you'd asked me a day or two before what I'd done in Easter 2011 I might well have remembered that we'd spent it on the Gold Coast.

"When I saw the written diary I remembered a number of things about that holiday, not the least being that my eldest son told me on that occasion that his career post-school would be the Army, which thankfully he's pursuing.

"I look at this note, I read the note, I accept that is is in my handwriting and I still have no recollection about the receipt of the gift or the bottle of wine."

Mr Watson put to O'Farrell the question on everyone's lips: "Have you got any idea what could have happened to the wine?"

"No," a brusque Mr O'Farrell replied.

"It would be a very unusual bottle to open over a spag bol on a Friday night, you'd agree," Watson pressed.

"I cannot speculate," O'Farrell replied. "If my mistaken recollection yesterday, which I gave in good faith believing it was an accurate recollection ... I look at this today and it still does not jog a recollection about either a bottle of wine on a porch, because I understand now the evidence is that it was left on the porch, or what happened to that bottle of wine."

Mr O'Farrell's barrister, John Agius, SC, the counsel assisting the 1990s Wood royal commission, said there had been no suggestion Mr O'Farrell acted corruptly or gave an advantage to Australian Water.

"It will not be suggested either," Mr Watson said.

"I am indebted for that," Mr Agius said.

"In the early days of the new government, was it common for you to receive letters and notes and small gifts to mark the fact that you had taken government after 16 years in office [opposition]?" he asked.

"There was an avalanche of letters, of emails, and there was one or two small gifts, including smaller value bottles of wine - bottles of wine that I'm more familiar with the value of than a 1959 Grange," Mr O'Farrell said.

"And did you have your staff check the value of the box of wine or other wine that came to your office?"

"I remember, and thankfully so does a staff member remember, that a box of wine did arrive, I think a bit later than the period we're talking about, from Hunter Valley wine interests. She checked the value of the wine and the wine was valued at $30 per bottle. It was a dozen bottles of wine, which means it was below the limit [that would require it to be disclosed on the pecuniary interests register] and was dealt with appropriately."

"What was your habit in relation to responding to messages of congratulations and the odd gift?"

"Where appropriate, responses were made. So whether, if they were email congratulations, usually the email system would be used. Letters were done in the usual way and the odd gift, there would be a note that was handed to my staff to be posted."

"A note from you?"

"A note from me where I was able to, I do try to keep up that correspondence."

"So this is a practice you would have been aware of when you were giving evidence yesterday?"

"Yes, and I regret, as I said to counsel assisting, that having seen the note, it still does not jog my memory about a delivery around Easter 2011 or around what happened to the bottle and its contents."

Man of integrity: Abbott

During a press conference about Badgerys Creek this morning, Prime Minister Tony Abbott said of Mr O'Farrell: "He texted me that I should call him and by the time I saw the text, I think he was about to go in and make his statement and we had a brief conversation and I said to him that he was acting from high honour here and I just said how sorry I was that this wasn't happening in three or four years' time because Barry is a man of honour.

"He is a man of integrity. He is a very decent man and I think he has been a very capable Premier over the last three years. I think he will be missed."

Mr Abbott also expressed confidence that Mr O'Farrell misled the ICAC inadvertently.

"This is the thing, if you're in public life, you meet lots of people, from time to time people give you things," Mr Abbott said.

"They might give you ties or pens or a bottle of wine, and sure, a bottle of Grange is pretty special, no doubt about that.

"Given that premiers and other senior politicians have very crowded busy lives, I don't think it is reasonable to expect everything from some years ago to be front of mind."

O'Farrell's statement

Mr O'Farrell made the following statement to the press this morning. He refused to take any questions.

"I've been advised overnight that this morning at ICAC a thank-you note from me in relation to the bottle of wine will be presented. I still can't recall the receipt of a gift of a bottle of 1959 Grange, I can't explain what happened to that bottle of wine. But I do accept that there is a thank you note signed by me and as someone who believes in accountability, in responsibility, I accept the consequences of my actions.

"The evidence I gave to the independent commission against corruption yesterday was evidence to the best of my knowledge. I believe it to be truthful and as I said yesterday it's important that citizens deal with police, deal with the courts and deal with watchdogs like ICAC in a truthful fashion.

"In no way did I seek to mislead, wilfully or otherwise, the Independent Commission Against Corruption. But this has clearly been a significant memory fail on my part, albeit within weeks of coming to office, but I accept the  consequences of my actions. And that is that as soon as I can organise a meeting of the parliamentary Liberal party for next week I will be resigning the position and enabling a new Liberal leader to be elected, someone who will then become the Premier of NSW.

"Whilst I'm sure you have questions, I don't think this is the time for those questions to be dealt with. There will be other occasions for those questions to be dealt with. But what's important here is that again I'm seeking to support  the process of the Independent Commission Against Corruption, a body that I've always supported throughout my career. I've accepted that I've had a massive memory fail, I still can't explain either the arrival of a gift that I have no recollection of or its absence, which I certainly still can't fathom.

"But I accept the consequences. In an orderly way, a new leader will be elected to take on the position of Premier of NSW."

Two-horse race

The contest to replace Mr O'Farrell is essentially a two-horse race between Treasurer Mike Baird and Transport Minister Gladys Berejiklian.

- with Sean Nicholls