The office of Prime Minister Julia Gillard confirmed reports that the staff blamed for leaking her presence and that of Opposition Leader Tony Abbott during an official function for the Australia Day has resigned.

Local media reports identified the source of information as Tony Hodges, who according to The Australian was working as Ms Gillard's media adviser.

The paper reported too that Hodges quit on Friday when it became apparent that the information he shared with an unidentified contact made its way to the ranks of Aboriginal Tent Embassy protesters.

The information reportedly disclosed that Ms Gillard and Abbott would attend an awarding ceremony at The Lobby restaurant, which prompted the activists to surround the site and personally voice out their grievances before the two government officials.

Reports also indicated that the protesters were specifically angry at Abbott following his earlier remarks that supposedly called for the Tent to be 'dismantled', which was established 40 years ago.

Abbott, however, denied that he wanted the protesters to leave and abandon their cause.

He insisted that his words were taken out of context, which resulted to the misunderstanding.

As it turned out, the protesters banged on the glass walls of the restaurant, yelled out their complaints and threatened the security of the two officials, prompting security officers to bodily move out Ms Gillard and Abbott out of the site.

Ensuing probe pointed to Hodges as the source of information that inflamed the emotions of the protesters but Ms Gillard's office denied that the staffer had intended to expose the Prime Minister and the Opposition Leader in danger.

Bruce Hawker, a senior Labor official, told ABC that Hodges' actions were merely motivated by pure excitement and were not meant to inflict harm on anybody.

"They want to be in there supporting their team, they want to maximize the embarrassment to the other side to the benefit of theirs and sometimes things go wrong," Hawker was quoted by ABC as saying on Saturday.

His resignation, Labor officials said, should put the whole issue to rest.

However, the Coalition was far from convinced and called on the Australian Federal Police (AFP) to look deeper and establish what really transpired.

Ms Gillard, according to Abbott, needs to clarify many things and stressed "she really owes us a full explanation, she owes it to the police and she owes it to her own protection detail."

"Exactly what did her staffer say, exactly to whom did her staffer say it and who instructed the staffer to say what he did," Abbott added.

On its part, the AFP revealed that its investigation on the matter has been underway and hinted that a number of the protesters may be charged for the tense incident that many have criticized as disrespectful to the Prime Minister.

AFP officials added that the agency can act on the Coalition call but a formal referral must be started, which it clarified need not to come from Ms Gillard.