Azealia Banks alleged that Russell Crowe had been drinking alcohol before the altercation and he'd been flirting with her before he "just kind of switched" and ejected her from the party.
Azelia Banks has posted an emotional statement to her followers on Instagram following her alleged hotel bust-up with Russell Crowe, declaring: "I give up and I give in."
"These past few days have been rough," she wrote on Instagram.
"Although this situation was beyond my control, I promise you all that this is the last time I will be in the news for anything negative. For all of the love and support my fans have given me over the years I owe it to you to keep it straight music. No politics, no race stuff, no feminist stuff, no nothing."
"Somewhere along the way the I got sucked into this never ending war with the media that I quite honestly don't have the energy, patience, or care to keep fighting. I GIVE UP! And I give in."
Banks has also backed out of her record deal with Wu-Tang Clan rapper and producer RZA because he refused to defend her during her alleged hotel bust-up with Russell Crowe, according to reports.
The 25-year-old rapper claimed in a now-deleted Facebook post 52-year-old Crowe called her a n****r, choked her and spat at her in his suite at the Beverly Hills Hotel in LA. Crowe has denied any wrongdoing.
RZA invited Banks to the party, which was also attended by Gladiator director Ridley Scott, Swedish singer Elliphant and Australian comedian Jim Jefferies.
Now TMZ reports Banks has pulled out of her record deal with RZA, set to close this week, after claiming he didn't back her during the alleged altercation. But insiders told the gossip site RZA won't lose sleep over Banks' decision and believes she was "full of it" over her description of events.
RZA directed Crowe in his 2012 film The Man with the Iron Fists and starred alongside him in 2007 film American Gangster.
Meanwhile, comedian Jim Jefferies (who was at the party) has also publicly defended Crowe. Speaking through his Australian manager, Jefferies described Banks' version of events as "utter nonsense" and Crowe's as the absolute truth.
Jefferies, who declined to comment personally because of the battery allegations that have now been brought by Banks against Crowe, told his manager Andrew Taylor the following day that Banks was the aggressor in the incident.
In a later tweet, Jefferies called Banks "a complete liar" and offered to take a lie-detector test to back up his version of events.
"I was in LA at the time - but not at the party - and Jim told me the following day that Azealia's claims are utter nonsense and she could find herself in a lot of trouble," Mr Taylor said.
In an interview with The Sun newspaper, Banks alleged that Crowe had been drinking vodka, whisky and moonshine before the altercation and he'd been flirting with her before he "just kind of switched" and ejected her from the party.
America's TMZ reported that Banks allegedly threatened to cut Crowe's friends and quoted her as shouting: "You would love it if I broke my glass, stabbed you guys in the throat, and blood would squirt everywhere like some real (Quentin) Tarantino s**t."
Crowe has denied any wrongdoing with several witnesses backing his story that he remained calm and carried her out of the room in a bear hug.
In the interview with The Sun, Banks claimed that didn't start the trouble and she said that the incident had left her feeling "mishandled" and "mistreated".
"Russell and I get next to each other," she told the newspaper. "He's talking to me, I'm talking to him, and we start flirting. We're having a really good time. He's got his knee on my knee, he's touching my leg, I'm playing him my music, he tweets my song The Big Big Beat. He's like, 'I love this, you're beautiful, this is great.'"
She said the mood changed when she made fun of another guest who is an aspiring horror film maker.
"Russell just kind of switched. He was like, 'Well you know what? You're young and you've never done anything in your career so you don't know what you're talking about," Banks said. "I'm a little offended but I was still keeping it light. I was like, 'Your best days are behind you.'"
Banks claimed the situation then escalated when another guest, a woman, stuck up for Crowe.
"I said, 'Girl, this is not the right time or place for us to be fighting, like what would happen if I got up and I slapped the s**t out of you, or I took a glass and f***ing threw it at you and you were bleeding all over the place? I would be wrong and we'd all be wrong, and the party would be done.'"
Beverly Hills Police have confirmed the incident is being investigated and that both parties would need to be spoken to.
Swedish singer Elliphant confirmed that she was at the party - but said she left before the altercation happened.
"I was invited by a friend of mine; I'm not friends with Russell," she said.
"It was lovely to see (Azealia) there because I hadn't seen her for a while. I felt I was a little bit more party than that party, everyone was just sitting around, chilled out. It was so boring, I had to go. I just left and then all this shit went down, I wished I had stayed, I missed it all."