Devastated Australian Rugby Union chairman Peter McGrath yesterday withdrew his nomination for the International Rugby Board and stood aside from his post pending an investigation into his alleged inappropriate behaviour at a sponsor's function in France.

McGrath, clearly distressed at the impact this saga has had on his family and reputation, broke down in tears while speaking with the Herald from his French hotel room yesterday afternoon. Amid suggestions he will be sacked, McGrath believes some figures at the ARU want him gone and they played a hand in the lodging of a complaint against him by major sponsor Bundaberg Rum.

"I am an advocate for change and I have my detractors, if you want to make changes you are going to have your ups and downs, but I never expected this kind of personal attack," he said. "The story, the way it was released, has been aimed to do the most damage personally that I could envisage."

McGrath, whose character has never been in question over 12 years as a rugby official, will fly back to Australia in the next few days and is exploring his legal options because he feels his reputation has been tarnished.

A Bundaberg Rum representative formally complained to the ARU that McGrath had trouble getting his words out after a few drinks at a lunch in Marseilles before the Wallabies' quarter-final against England two weeks ago. There was no suggestion McGrath spoke or acted inappropriately.

McGrath said he walked back to his hotel room after the function and was then invited by ARU chief executive John O'Neill for a 10pm dinner and more drinks. The pair even discussed "high performance" issues.

"I remember the night clearly, I remember everything I said. I am pretty sure that if I had been drunk I would have been spoken to by our chief executive about it," McGrath said. "I don't deny that I had a few drinks but I utterly refute that I acted inappropriately. If people have an issue with me, they can talk to me about it - that is how I would operate with anyone."

The complainant has not contacted McGrath but the ARU chairman said he would "most certainly" speak with the representative soon.

The ARU's human resources committee is now investigating the incident and will make a recommendation to the board, which will decide McGrath's fate. In the meantime, ARU deputy chairman and the former Defence chief, Peter Cosgrove, takes over McGrath's post.

The timing of the complaint forced McGrath to withdraw his nomination to become a delegate of the IRB board. The election was held yesterday. "I have stood aside pending the board's investigation, I have not resigned. I have withdrawn my nomination from the IRB board," McGrath said.

"I did not want to walk into that room with a cloud of this nature hanging over my head. Everything I have done in the past 24 hours has been to protect my family, and the reputation of the ARU and IRB.

"I have a son in Sydney …" It was at this point, contemplating how the episode had affected his family, that McGrath began weeping. "I just think this is an opportunity for someone to elevate this to a level that embarrasses me."

But ever the pragmatist, McGrath said he had "complete faith" in the ARU board and could continue working alongside those who may have attempted to remove him should he be reinstated. "I won't get into a slanging match with anyone over this," he said.