The environment minister has extended an olive branch to the former Pacific leader she has been accused of offending, despite her limited memory of the exchange.
"I don't recall the complete conversation," Melissa Price told parliament on Thursday.
Labor senator Patrick Dodson has accused Ms Price of making offensive remarks to former Kiribati president Anote Tong about his region always demanding "cash".
Ms Price told parliament she came across the group at a Canberra restaurant earlier this week but says it was a "very pleasant, light-hearted conversation".
She called Mr Tong on Wednesday to apologise after Senator Dodson penned a letter to her venting his concerns.
"I said: 'I don't agree with the words that were reflected in the letter but if I have caused any concern, then I am very sorry about that," she told parliament.
"He accepted my apology."
The government greatly values its relationship with Australia's Pacific neighbours, she added.
Mr Tong has no doubt the offending words were spoken.
"I do have a bit of a hearing problem but certainly the account they (his dinner companions) shared with me was not different," he told ABC radio on Thursday.
Ms Price and Mr Tong are hoping to put the scandal behind them.
Senator Dodson says he is "appalled" by Tuesday evening's exchange and remembers what Ms Price said very differently.
"'It is for the cash. For the Pacific it's always about the cash. I have my chequebook here. How much do you want?'" senator Dodson claims the environment minister said.
The comments allegedly came after Ms Price was told Mr Tong wanted to meet with her about climate change.
Mr Tong is concerned the encounter has taken away from his mission to raise awareness about the environmental issue.
"Let's put this behind us, let's move on, I don't want it to take the focus of attention," Mr Tong said.
Australian Associated Press