A Hunter Valley woman given a suspended jail term for grooming a boy for sex while she was a teacher's aide has withdrawn her appeal, after a judge warned she got off lightly.

Jackie Mary Hays, 51, pleaded guilty to grooming a boy, 15, for unlawful sexual activity in 2015.

Hays was a teacher's aide and partially blamed a weight-loss drug and unhappy marriage for her offending, which involved lewd text messages.

She told police she had become infatuated with the boy, but wanted to wait until he was 16 before they had sex.

In September last year, Newcastle Local Court Magistrate Robert Stone sentenced Hays to a 12-month suspended jail term.

Mr Stone said she had shown remorse, had lost her marriage, her job, and had suffered denouncement in the community due to coverage in the media.

Alleged mental illness behind proposed appeal

Hays had applied to have her matter dealt with under the Mental Health Act, but Magistrate Stone rejected that.

Her legal team told the court she suffered from a borderline personality disorder.

Mr Stone recommended she continue counselling and noted there were no sex offender programs in jail for female inmates.

He said several people had provided character references and that she seemed genuinely sorry.

"The general theme is that she is immensely sorry, she acted out of character and learnt from her mistakes," he said.

In the wake of sentencing, Hays intended to appeal the magistrate's decision not to allow her to be dealt with under the Mental Health Act in the District Court.

Any outcome of that appeal would be expected to impact on her sentence.

Judge's stern warning prompts appellant to withdraw

Hays' appeal in relation to the Mental Health Act decision was listed in Newcastle District Court yesterday, but in a dramatic turn of events the matter was withdrawn.

It came after Newcastle District Court Judge Julia Baly turned toward Hays and gave her assessment of the case over which she presided.

"I have read the material, I have read the Crown's bundle and I have read the victim impact statement from the young victim and your letter to the court," Judge Baly said.

"I am going to give you a warning because this is very serious offending and there are two very significant aggravating factors that make it even worse."

"It was egregious and a gross abuse of trust as a teacher [aide], and secondly the harm done to this young man was substantial. But the magistrate did not have that material [victim impact statement] available to him.

"The warning I am giving you is this — if you proceed with your appeal I may well increase your sentence because in my view the penalty handed down was light, given the nature of what you did.

"You were very lucky to get what you did, which was a suspended sentence for 12 months.

"If you were to proceed with your appeal, from what I know so far I may increase your sentence.

"I may take a different view [to the magistrate] and I am giving you the opportunity to withdraw from your appeal."

Hays appeared shocked and after a short silence responded.

"I have just read the victim impact statement and the student was abusing drugs way before," she said.

There was heckling from the gallery before Hays decided not to proceed further.

"Clearly the only option I have is to withdraw the appeal," she said.

Hays could have faced a maximum 10 years in jail if the initial case had been heard in the District Court.

But the DPP agreed to have it dealt with in the local court where maximum penalties are capped at two years.