The Sydney Approach (North) (APP(N)) radar controller observed a Cessna Citation infringe the Sydney control zone whilst departing Bankstown. At the same time, a Boeing 747 tracking towards Sydney on the runway 07 localiser had left 2,000 ft on descent. By the time the Citation was noticed by APP(N) the aircraft was approximately 2 NM abeam the 747, some 500 ft below, and travelling in the opposite direction. As APP(N) was about to inform the crew of the 747 of the conflicting traffic, the pilot of the 747 informed the controller that he had a TCAS Traffic Advisory of an aircraft 600 ft below and abeam. APP(N) advised the pilot of the 747 that the other aircraft was now clear of his track. The pilot of the Citation later commented that, because the passenger charter flight was at night and in poor weather conditions, he was not prepared to undertake a steep turn after taking off in the 11 direction. He also believed his aircraft must have only just infringed the Sydney control zone as the DME indicated the aircraft had remained outside the zone. A subsequent examination of recorded radar data indicated that the Citation had infringed the Sydney control zone, and that horizontal separation had been reduced to 1.26 NM, with a vertical separation of 800 ft. The required minimum separation standard was 3 NM horizontally or 1,000 ft vertically.