An Australian couple has denied abandoning a boy born with Down syndrome to a surrogate they engaged in Thailand.

The plight of six-month-old Gammy, who also has a hole in his heart, has prompted calls for reform of surrogacy services in Australia.

Impoverished mother Pattaramon Chanbua told the ABC she gave birth to twins after agreeing to be a surrogate for the West Australian couple with a promised payment of about $16,000.

She claims the couple, who have not been identified, rejected Gammy and returned to Australia with his healthy sister.

But the baby girl's Australian father says the clinic's doctor only told them about the girl.

He has told the ABC they had a lot of trouble with the surrogacy agency and had been told it no longer existed.

Ms Chanbua said her doctors, the surrogacy agency and the baby's parents knew he was disabled at four months, but did not inform her until the seventh month when the agency asked her - at the parents' request - to abort the disabled foetus.

She told the ABC she refused the couple's request to terminate the pregnancy because in Thai culture it was considered sinful, but she could not afford Gammy's medical treatment.

After the child's plight was revealed in the media, an online fundraising campaign was initiated to collect $200,000 to pay for his treatment.

The GoFundMe campaign has now raised just slightly more than $206,000.

Ms Chanbua, 21, lives about 90 kilometres south of Bangkok with her two other children - a six-year-old and a three-year-old.

"Because of the poverty and debts, the money that was offered was a lot for me. In my mind, with that money we can educate our children and repay our debt," she told the ABC.

"I felt sorry for the boy. It was like this is the adults' fault and who is he to have to endure something like this even though it's not his fault?

"Why does he have to be abandoned while the other baby has it easy?"

Gammy is being treated for a lung infection in a hospital east of Bangkok and his condition is stable, a spokesman at the hospital said.

Call for reform of surrogacy services in Australia

Surrogacy Australia president Sam Everingham said Gammy was "in the best hands" with his mother in Thailand, but would welcome reform to prevent another child facing the same plight.

"He's with a mother who loves him, wants to care for him," he told ABC News Breakfast.

Sorry, this video has expired Baby Gammy: Calls for surrogacy reforms in Australia ( Virginia Trioli )

"We've rallied round to support this child via the GoFundMe campaign, so I think we're happy that he stays in Thailand with his surrogate mum right now. But we don't want to see this kind of thing happening again."

Mr Everingham said the laws and government support for couples investigating and pursuing surrogacy were not adequate.

"We do want to see the Australian Government putting money into surrogacy education and support for families who are at the moment going overseas with the Government really just turning their back on them," he said.

Prime Minister Tony Abbott said it was "an incredibly sad story" and the Government would look into the case.

In Australia, people from New South Wales, Queensland and the ACT are prohibited from entering a commercial surrogacy agreement overseas.

In Thailand the ruling military is cracking down on the often unregulated IVF and surrogacy industry.

The Department of Foreign Affairs says it is concerned by the reports and is consulting with Thai authorities.

ABC/Reuters