Prostitute scandal threatens Australian PM

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Australian Prime Minister Julia Gillard refused on Wednesday to detail her dealings with an MP accused of misusing a credit card to pay for prostitutes in a scandal that threatens her government.

Opposition leader Tony Abbott interrupted question time to demand Gillard make a statement about discussions she or her office had with backbencher Craig Thomson over a Labor Party loan that helped him pay legal fees.

But Gillard walked out of the chamber, along with some 30 other Labor Party members, during Abbott's speech, prompting the conservative leader to accuse the government of stonewalling.

"They are defending the unjustifiable," he told parliament.

The opposition has seized on allegations that Thomson paid for sex workers and escorts with a credit card issued by the Health Services Union in 2003 and 2005, when he was the national secretary of that body.

Thomson, who entered parliament in 2007, denies the accusations and says another unnamed person was using the card at the time of the alleged encounters.

The Health Services Union said on Wednesday it would refer the information it held on the matter to the New South Wales police, who are assessing whether to begin an investigation. Paying for sex is not illegal in New South Wales.

Gillard has faced repeated questions on Thomson, who abandoned his defamation case against the newspapers that first ran the allegations but not before New South Wales Labor had paid Aus$90,000 towards his legal fees.

She has previously been supportive of Thomson, whose marginal electorate is key to retaining her hold on power given she has only a one-seat majority in parliament thanks to a deal with three independents and a Greens MP.

Abbott said the government's preoccupation with defending Thomson, who would likely lose his seat if forced into a by-election, was preventing parliament from addressing issues of national importance.

"They are defending the indefensible and justifying the unjustifiable to protect their own position in government," Abbott said.

"This is a prime minister who is so determined to stonewall, who is so determined to ignore issues of integrity in government that she won't listen to the debate."