Disgraced former Labor powerbroker Eddie Obeid will be forced to pay back almost $300,000 in taxpayer-funded legal assistance as well as his $660,000 parliamentary pension after he lost his final bid to be freed from prison.

The NSW government says it will now take action to recover the legal fees after the High Court on Friday knocked back the former NSW minister's application for leave to appeal against his conviction and sentence for misconduct in public office.

Eddie Obeid will lose his pension.. Credit:Kate Geraghty

Also, under new laws introduced in May last year, Obeid will also be required to pay back his pension entitlements, which are likely to amount to as much as $660,000.

Before the loophole was changed, politicians convicted of a crime committed during their time in office could retain their pension or lump sum entitlements if they resigned before being charged with the offence.