Footage has been captured of Senator Lidia Thorpe on the footpath outside Maxine's Gentleman's Club at 3am on Sunday, with Senator Thorpe reportedly leaving a friend's 50th birthday celebration.
"You know what I say, to you, you know what I say to you and you …" she said to a group of people outside the club, in the footage aired by Seven News.
"... small penis, small penis."
One of the men replied, "You're a racist d**".
Senator Thorpe was pulled away from the group by a companion, but she continued: "All I've got to say to the black brothers there and anyone that we're fighting".
"Any black man that stands with the f****** white little c*** like that, youse can all get f***** too."
Before the senator left the club, she appeared to pull out her mobile phone and start recording the men still lingering on the footpath.
"You, you are marked," she said.
Senator Thorpe issued a statement on Sunday night.
"It's sad people are using whatever they can to drag me down when we're trying to discuss important issues in this country," the statement read.
In March, Senator Thorpe was pulled to the ground by police after she attempted to intervene outside Parliament House in Canberra.
Jacqui Lambie speaks out against Thorpe
Responding to the incident on Monday and addressing Senator Thorpe, independent senator Jacqui Lambie said "you cannot keep doing this".
"A good start would be ... take the responsibility for your own actions and take them into your own hands," she told Sky News.
"There is no getting out of this, you are a politician. Sometimes we do muck up but not taking any responsibility for yourself is not very helpful."
Senator Lambie said the Victorian senator should seek counselling if she wasn't in a good way, as "something needs to be done".
