Kiwi-born politician faces new challenges as he is jailed then bailed over paying prostitutes using union money.

He was caught with his trousers down and stripped of credibility, but Craig Thomson remained defiant yesterday after being jailed for stealing union money to pay for sex with prostitutes.

The Kiwi-born former Labor MP, who has come to symbolise high-level corruption within the party's ranks and helped prop up Julia Gillard's minority government, continued to insist he had done nothing wrong.

After spending an hour in the cells, his lawyers lodged a successful appeal, court staff returned his jacket, tie and belt, and Thomson emerged on bail but unbowed.

"It is inappropriate for me or anyone else, be they media commentators or even parliamentarians, to be making comment in relation to this matter while it continues to be before the courts," he said.


That's a forlorn hope.

The 49-year-old's former colleagues in Canberra are considering finding him in contempt of Parliament for using parliamentary privilege to attack enemies and shift blame over the allegations.

And an upcoming royal commission into union corruption is set to examine wide scale fraud in the Health and Services Union (HSU) during the period Thomson was its national secretary between 2002 and 2007.

Ex-HSU head Michael Williamson, a former federal president of the Labor Party, is in jail awaiting sentencing after pleading guilty to defrauding the union of almost A$1 million ($1.1 million). He spent lavishly on luxury cars, holidays, private schooling for his children and entertaining his mistress.

Like Williamson, magistrate Charlie Rozencwajg said Thomson had been motivated by greed, displaying "blatant dishonesty" and a "breach of trust of the highest order".

He sentenced the former member for Dobell on the NSW Central Coast to 12 months behind bars, with all but three months suspended. Thomson was convicted of 65 charges of fraud and theft for using union funds on sexual services, and also travel expenses, cigarettes and firewood for his then wife, Christa. He also withdrew A$6250 from ATMs using union-issued credit cards.

During last year's trial in Melbourne, Thomson's legal team didn't challenge evidence from a prostitute known as Misty who worked for a Sydney escort agency. She slept with the father of two young daughters several times, and he always provided champagne.

"Sex always occurred on the bed and he would shower before and afterwards," she said.

Misty only realised his identity when she saw him on TV denying the escort allegations.

"I am in no doubt the Craig I performed a number of sexual services for ... is Craig Thomson the politician," she told the court. Defence lawyer Greg James, QC, unsuccessfully argued against a jail sentence because the case had publicly humiliated his client, destroyed his career and contributed to health problems.

And Thomson, who moved to Australia from Wellington as a child and unsuccessfully stood for re-election last year, faces a host of other issues before his appeal is heard in November.

The HSU has pledged to lodge civil proceedings to recover every cent he misused.

Although Thomson has agreed to pay A$24,538 relating to the criminal conviction, union officials insist the real figure is nearer A$400,000.

Throughout the five-year saga, Thomson has maintained his innocence, claiming rivals forged signatures and cloned mobile phones to explain his links to escort agencies.

In Parliament he accused HSU official Marco Bolano of framing him with a "bunch of hookers".

Yesterday Bolano said he doesn't expect Thomson will ever apologise. "He will always consider himself a victim."