Former defence chief Peter Cosgrove has been installed as acting Australian Rugby Union chairman after Peter McGrath stood aside pending an investigation into a sponsor's complaint about his World Cup behaviour.

A meeting of available ARU board members was held in France on Thursday 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.

"I did not act inappropriately in any way," McGrath told News Limited.

"I don't deny I had a few drinks.

"We all have a few drinks every now and then, but I'm shocked that it's perceived in this way."

An ARU statement said deputy chairman 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 gave no indication of a time frame for its investigation of the allegation.

Several senior ARU officials are not due back in Australia until next week, following the end of the World Cup.

An ARU spokesperson said Cosgrove, chief executive John O'Neill and president Paul McLean would represent Australia at Friday night's IRB council meeting in France.

Not for the first time this year, turbulent circumstances surrounding Australian rugby have pushed Cosgrove into the foreground.

Cosgrove was elected vice-chairman of the board back on April 28, the same day McGrath was made chairman following a fractious period among the code's administrators.

The 2001 Australian of the Year, Cosgrove, was nominated by the Queensland Rugby Union as one of its representatives on the ARU board after Terry Jackman was dumped following a no-confidence motion.

Cosgrove was part of a three-man sub-committee which initiated the search for a new ARU chief executive earlier in the year.

O'Neill was subsequently restored to his former position after Gary Flowers left the chief executive post earlier in the year.

Prior to being elected ARU chairman, McGrath had been chairman of SANZAR for almost 18 months.

An ARU board member for the past two years, McGrath had previously served a decade on the ACT board, on which he was chairman for six years.

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

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