A powerful Papua New Guinea cabinet minister has grinned after prosecutors withdrew an allegation he assaulted a woman near Bondi Beach.

Petroleum minister Jimmy Maladina, 58, was to face a hearing on Thursday over the contested allegation that he attacked a 31-year-old woman known to him in an eastern Sydney home.

But prosecutors instead withdrew the single count of domestic violence-related assault occasioning bodily harm related to the July 6 incident.

Police charged the politician, who had pleaded not guilty, after being called to the property in Bondi and finding two children present and a woman with facial injuries.

Maladina stood down from cabinet after charges were laid, only to be reinstated in October after the prime minister of the resource-rich nation reportedly received legal advice about the case.

After the case was dropped, he was seen smiling with his high-profile barrister Margaret Cunneen in Sydney's Downing Centre Local Court.

A restraining order application taken out on behalf of the woman was adjourned until Monday.

When the charge was laid in July, a PNG governor said he was "deeply embarrassed" at the arrest and expressed sympathy for the alleged victim.

East Sepik Province Governor Allan Bird said the allegation was deeply concerning given "violence against women in PNG has reached pandemic proportions and our women and girls continue to live in fear".

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Luke Costin - AAP