Members of the council took trips to destinations such as Mildura by $15,000 charter flight, the Hunter Valley, Mudgee and Orange. It paid for meals at plush restaurants such as Catalina's at Rose Bay.

The Premier's statements were made yesterday as the Sydney Morning Herald learnt two of the attendees at functions held by the council were colleagues of Mr Macdonald on the staff of the former attorney-general Frank Walker in the 1980s.

The Premier said he was conducting a review of all boards and committees as part of a broader government department restructure.

Details of Mr Macdonald's spending came from documents obtained under freedom-of-information law.

"I expect any expenditure to be able to meet the public interest test … and to be able to be justified to the person on the street," Mr Rees said.

"Where it can't be justified, [the boards will be] be gone. The minister has offered a vigorous defence of this. I'm not commenting on the detail."

One of Mr Macdonald's most regular lunch partners, the businessman Greg Jones, is the council's chairman and was a colleague of Mr Macdonald in Mr Walker's office.

Mr Jones and his companies donated $25,000 to the Labor Party in 2007.

Mr Jones and Mr Macdonald worked hard to win government approval and funding to stage the controversial V8 Supercars race at Homebush in December.

Mr Jones did not return Herald calls yesterday.

Another person on council trips was Hans Heilpern, also formerly on Mr Walker's staff and a former chief of staff for Mr Macdonald.

The chief executive of News Limited, John Hartigan, is also a member of the council and has attended a few functions. Most other attendees have been winemakers, although the then head of Mr Macdonald's state and regional development department, Loftus Harris, also attended two functions.

There has been pressure for Mr Macdonald to vacate his upper house seat to allow the Labor Party's Left assistant secretary, Luke Foley, a close ally of Mr Rees, to move into Parliament.

But Mr Macdonald has made it clear he was staying until the 2011 election. Mr Rees could antagonise the party if he moved the powerbroker.

The acting Opposition Leader, Andrew Stoner, said Mr Macdonald was a "serial offender". Last year it was revealed Mr Macdonald used departmental funds to buy office furniture for his home and a television set.