The federal government says it will not ask embattled MP Craig Thomson to quit the Labor Party amid the deepening scandal into allegedly misspent union funds.
Former ALP powerbroker Graham Richardson says the saga is damaging the party and has suggested Mr Thomson give up his Labor membership and sit on the crossbenches.
"This has got an awful smell to it that won't go away," he told Sky News.
"If there was a way out and they could persuade him to sit on the crossbenches, I hope they find it and I hope they take it soon because this Labor brand can't take much more."
Government frontbencher Anthony Albanese said any action was up to Mr Thomson, but vouched that the party would not ask him to leave.
"Certainly not," he told Network Ten on Sunday.
"It's a matter for Mr Thomson what he does, but we must remember that these are just allegations, which he has denied."
Asked if he believed Mr Thomson, who has been accused of using his union credit card to pay for prostitutes, lavish meals and to withdraw more than $100,000 in cash from ATMs, Mr Albanese said: "Absolutely.
"People are entitled to the presumption of innocence."
The ALP has also come under question for paying at least $90,000 of Mr Thomson's legal bills - most likely to ward off bankruptcy, since that would have forced the member for Dobell from his seat.
But Mr Albanese denied it was significant, arguing that the Liberal Party set the precedent this year when it helped pay a Victorian minister's legal fees.
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