Craig Thomson will not be charged by NSW police over union credit card for prostitutes scandal

NSW POLICE have dropped their investigation into embattled Labor MP Craig Thomson over allegations he misused a union credit card to pay for escort services.

The decision came yesterday after detectives completed their internal assessment of claims against Mr Thomson and found no evidence of illegality.

Senior police were last night liaising with their counterparts in Victoria about the matter and are expected to officially refer the case for their assessment in coming days.

"Bottom line is a crime hasn't been committed," a senior police source confirmed yesterday.

"We went through a lot of documents and assessed criminality, but it hasn't reached that threshold."

It's understood that Fraud Squad detectives found several reasons why a formal investigation could not proceed and, on that basis, decided yesterday to drop their review. Part of the focus of the NSW investigation had centred on the crime of "deception" and whether Mr Thomson deceived any brothels in NSW when he paid for services using his Health Services Union credit card.

"There may be a crime committed if there are restrictions upon use of the card, but in the absence of that there is no crime," the source said.

The matter of whether Mr Thomson deceived HSU members and misused their funds will be left to Victorian police, who will have access to vital accounting documents in their state, to assess.

NSW police became involved on August 23 after receiving a letter from Opposition legal affairs spokesman George Brandis, asking that they step in.

His letter stated that there were matters which ought to be investigated by the police.

Mr Brandis had also phoned his NSW counterpart, Greg Smith, to discuss possible prosecution.

It has been alleged Mr Thomson used his credit card while boss of the Health Services Union to pay for escort services and, later, try to cover it up.

Court documents claim he tried to disguise payments to a number of escort agencies in Sydney and Victoria.

Yoni Bashan