A pair of St George Illawarra Dragons players had to be separated in Mudgee following the club's 42-24 Charity Shield loss to South Sydney.

The Dragons outfit, who have already lost a number of players this year to injury or off-field drama, succumbed to their 10th Charity Shield loss in 11 seasons, an embarrassing effort that saw the club trail 26-0 at half-time.

Despite the loss, the players had pre-organised a night out in the Central West town before returning to Sydney the following day, however the night reportedly took a turn at the team's hotel, the Winning Post.

The Daily Telegraph have confirmed that Mikaele Ravalawa and Zane Musgrove were the two players involved in the heated exchange.

While no curfew was given, the players were reportedly told to return at a decent hour, however when the squad returned, a select few players continued drinking.

Ravalawa and Musgrove had to be broken up at 6am Sunday morning.

9News' Danny Weidler reports that two players got into a heated argument following the loss, and while no fists were thrown, the pair had to be separated by players and club officials.

"The club still allowed them to have a night out in Mudgee (following the Charity Shield loss) which was pre-scheduled," Danny Weidler said on 9News on Monday night.

"They were fine on their night out according to my sources, but when they got back to their team hotel, 'The Winning Post' in Mudgee, that's where a heated exchange took place between two players.

"Other players, and other people at the Dragons had to step in to sort out the situation. Now the Dragons are insisting there were no punches thrown between the players, but they're saying it was definitely a heated exchange.

"The behaviour of the players, according to the Dragons, does not meet their club standards, and they'll be looking further into it."

St George Illawarra released a short statement after the story broke on Monday night.

"The Dragons are aware of a verbal argument that took place between two players at the team hotel on Sunday morning," the club said via their website.

"The club regards this behaviour as unacceptable and will now determine whether any disciplinary action is warranted. The club will make no further comment at this time."

The side will have time to process the incident due to their opening round bye, and aren't scheduled to play until the final match of Round 2.