Melbourne player Aaron Davey has denied starting an explosive race-related rumour concerning coach Mark Neeld.

The AFL's race-related fiasco took another twist when Melbourne indigenous player Aaron Davey denied any involvement in the controversy.

The Demons released a statement on Tuesday night, quoting Davey, after AFL official Mifsud had publicly apologised to Melbourne coach Mark Neeld.

The AFL's reputation has taken a hammering after it emerged Mifsud, their national community engagement manager and most senior indigenous employee, had helped spread the false rumour about Neeld.

The AFL is refusing to reveal the original source of the allegation, but comments by Mifsud at a media conference indicate he claims to have heard it from a Melbourne indigenous player.

"I strongly deny any involvement in the matters discussed at today's press conference," Davey said in the statement.

"I am proud of Melbourne's support network for our indigenous players, which I believe is the best in the AFL.

"I'm pleased that the AFL has come out strongly in support of Mark and that Jason has apologised to Mark and the club."

Mifsud offered his resignation after admitting his role in the matter.

AFL chief executive Andrew Demetriou did not accept the offer but said Mifsud had been "dressed down" and warned.

Neeld was furious over the rumour, in which he allegedly spoke with the Demons' non-indigenous players individually over the pre-season but only addressed indigenous players as a group.

Ex-St Kilda coach Grant Thomas made the allegation public in an online column on Monday, although Thomas later withdrew it after a phone call from Neeld.

Mifsud revealed on Tuesday that he was the one who had given Thomas the information.

"There's absolutely no truth - not one scintilla of truth - to this story," Demetriou said of the claim.

Two comments from Mifsud at the Tuesday media conference gave a strong impression about the original source of the claim.

Asked why the person had made the claim, Mifsud said it was because "where he's at in his current life, the demands that have been elevated at the Melbourne football club."

Mifsud was later asked why the person's identity remained a secret.

"It's widely acknowledged by the clubs themselves that senior indigenous players and indigenous players carry a significant pastoral care role within the clubs and they're a great source of insight and cultural leadership across the whole organisation," Mifsud said.

"Equally, indigenous players carry a significant social burden as well."

This controversy follows on directly from Matthew Rendell resigning last month as Adelaide's recruiting manager.

Rendell was effectively forced to quit after it emerged he had told Mifsud of his concern that clubs might only recruit indigenous players if they had one white parent.

Mifsud and Thomas were talking about Rendell's resignation when Mifsud mentioned the Melbourne rumour.

Rendell and Mifsud worked under Thomas when he coached the Saints.

Demetriou said Mifsud's comment to Thomas was "inadvertent".

Mifsud added: "I would like to offer my full and unreserved apology to Mark Neeld and Melbourne." He said he was told the claim three weeks ago, but had only been able to speak to the source on Monday night, after the controversy had erupted.

Mifsud and Demetriou denied the person was escaping "scot-free".

"This person, I'm sure, will be spoken to and counselled about the error and I'm sure this person isn't feeling particularly good today," Demetriou said.

Demetriou also said that Rendell could soon be working in the AFL industry again after apologising for his comment to Mifsud.