In a statutory declaration former Wollongong councillor Frank Gigliotti claims he was invited to a meeting with Ms Hay and Mr Vellar in 2007, where he was pressured to overturn a council decision made on Mr Vellar's North Beach Bathers Pavilion proposal.

Opposition Leader Barry O'Farrell said Mr Iemma had no choice but to stand Ms Hay down from her role as Parliamentary Secretary for Health.

``It's now clear Ms Hay's involvement in this scandal is wider than one phone call and routine representations, as she claimed at the time,'' he said.

``Morris Iemma can no longer get away with sticking his head in the sand.''

Ms Hay told the Mercury on Thursday the matter had already been dealt with by the Independent Commission Against Corruption.

``It is my understanding that this matter has been dealt with by the ICAC which found that I was not a person of interest and I have nothing more to add.''

Mr Vellar said he did not recall a February 2007 meeting.