Australian Rugby Union chairman Peter McGrath has stood aside pending an investigation into a sponsor's complaint about his behaviour at the World Cup in France.

A meeting of available ARU board members was held in France last night where they accepted McGrath's offer to stand down until the matter had been resolved.

McGrath has "totally refuted'' a complaint from one of the ARU's major sponsors Bundaberg Rum that he was in an intoxicated state when he joined a group of sponsors' representatives on the eve of the Wallabies' quarter-final loss to England.

An ARU statement today said deputy chairman Peter Cosgrove would assume the position of acting chairman in McGrath's absence.

"This matter will be dealt with expeditiously and transparently by the ARU board,'' Cosgrove said.

The ARU said there would be no further comment until investigations had been completed.

ARU chief executive John O'Neill confirmed that a formal complaint had been lodged regarding an incident in Marseille.


McGrath, who is a lawyer, has conceded he had been drinking at the time but said he was shocked to be the subject of a complaint.

"I did not act inappropriately in any way,'' he told News Ltd. "I don't deny that I had a few drinks ... but I'm shocked that it's been perceived in this way.''

McGrath said he had never had his behaviour called into question because of alcohol in a 30-year association with both rugby codes as a player and administrator.