In the wake of their historic victory O'Connell fired a broadside back at Gatland, suggesting he should keep his ego in check.
But with the Lions tour party due to be selected in three weeks time, Davies has declared: "It's done. It's finished."
Speaking to BBC Wales, Davies said the incident was now "water under the bridge" and didn't expect it to be an issue moving forward.
"We've said what we wanted to say. They will now, like the rest of us, look forward to being a Lion with the objective of going to South Africa having a successful tour - I can't see that that is going to rear its head again," said Davies.
As the countdown continues to the selection date of April 21, Davies, head coach Ian McGeechan and the remainder of the management team and selectors advisers will be monitoring players in the Heineken Cup quarter-finals.
Davies was in Coventry to see the two EDF Energy Cup semi-finals and would have been disappointed to see Gavin Henson, Mike Tindall and Ian Gough all leave the field with injuries.
"When you think of the Heineken Cup there is one game there that's just a little bit more Wales v Ireland again - the Ospreys playing Munster," added Davies.
"That's going to be a big occasion where a lot of players who are in contention will be competing once more."
The Lions are set to announce a squad of 35 or 36 players and Davies admitted that after "a very uneven Six Nations" the selectors will be looking at form in other competitions.
"We're getting to the nervous stages now. We are likely to have to put people out who may have done very well, but in the end we have to be very cruel in selecting the 35 or 36 players that we wish to take with us," said Davies.
"It was a very uneven Six Nations. There were those who had their ups and downs, but the only team that seemed to me to have performed uniformally was the team that in the end won the Grand Slam - Ireland.
"They were pretty consistent throughout the season, whereas the others tended to drift in and out of form."