An Australian Prime Ministerial staffer has been linked to yesterday's ugly protest incident in Canberra, forcing his resignation and acutely embarrassing PM Julia Gillard.

In an early evening statement, the Prime Minister dismissed as 'false' claims that one of her staff had spoken to people at the Aboriginal Tent Embassy prior to yesterday's angry protest that temporarily trapped her and Opposition Leader Tony Abbott.

But Ms Gillard acknowledges that a member of her media unit 'did call another individual yesterday and disclose the presence of the Opposition Leader at the Lobby restaurant. This information was subsequently passed on to a member of the Aboriginal Tent Embassy.'

The Prime Minister says the media officer did not 'suggest or encourage violence' but that his action 'was an error of judgement. As such, the staff member's resignation has been accepted.'

He is Tony Hodges, one of four press secretaries working in Julia Gillard's media unit.

The link is deeply embarrassing for the Prime Minister and leaves her shouldering some of the blame for an incident where many had pinned responsibility on Opposition Leader, Tony Abbott.

Earlier yesterday, Mr. Abbott had been asked whether the 40 year old Aboriginal Tent Embassy in Canberra should be moved.

"I think a lot has changed since then," he said, adding "I think it probably is time to move on from that."

Tony Hodges' departure is an acknowledgement that, unwittingly or otherwise, the PM's own media unit helped stir the anger that led directly to yesterday's incident.

- Sydney Morning Herald