At the time he received the payout, Mr Thomson was suing Fairfax Media over the allegations of misuse of his credit card which had been uncovered during an internal audit conducted for the union after his departure.

Mr Thomson said someone else had used his credit card. But records obtained under subpoena by Fairfax revealed the credit card vouchers for the brothel and escort agency transactions were not only issued in Mr Thomson's name and signed by him, but the driver's licence details on the back of the vouchers belonged to a Craig Robert Thomson of Bateau Bay.

The NSW Supreme Court heard that Mr Thomson's mobile was used to call ''Sydney Escorts - Room Service'' twice and to phone union and Labor officials before and after the calls to the escorts. He later dropped the case.

It has since been reported that the ALP's NSW head office paid $150,000 of Mr Thomson's legal bills to stop him being bankrupted, which would have automatically excluded him from political office, leading to the likely collapse of the government. The former senator Mark Arbib was questioned about his alleged involvement in organising the payments of Mr Thomson's legal bills. Mr Arbib told the Senate the matter was unrelated to his portfolio and should be addressed to Mr Thomson and the Labor Party.

Until Mr Thomson dropped his case against Fairfax, last June, he was telling people that not only was he innocent but he had won the case against Fairfax.