Despsite the furore, it appears the Queen and the Australian prime minister are getting on exceptionally well.
Eyebrows were raised because Julia Gillard shook the monarch's hand rather than curtsying when she arrived Down Under.
The Australian leader defended her actions, saying: "The advice that was given to me was very clear – that you can make a choice with what you are most comfortable with."
"That's what I felt most comfortable with. The Queen extended her hand and I shook her hand and bowed my head."
On Friday, the pair looked to be ignoring the controversy.
Ms Gillard bowed and shook the Queen's hand at a reception in Parliament House in Canberra.
The two ladies laughed and smiled at the event for 700 guests including sports stars, clerics and diplomats.
More on the Queen's 16th official trip to Australia.
Photo: © Rex Features