Craig Thomson, Australian MP, investigated for sex scandal

An Australian MP, Craig Thomson, is being investigated for involvement in a possible sex scandal and stood down from head of the House Economics Committee Tuesday.

Police are investigating claims Thomson used a work credit card to pay for prostitutes, BBC states. Thomson allegedly paid for escort services as well as took out more than $104,000 in cash on a card from the Health Services Union, where he worked for two years.

An opposition politician recently gave police new evidence on the matter, it reports.

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Thomson has denied the claim and has said a friend used his card by forging his signature. He has said other officials had access to the credit card.

He said in a statement that he is stepping down to avoid disrupting the committee's work, ABC News reports.

"Today I have advised the Secretary of the House Economics Committee that I have decided to resign as chair of the committee," he said. "The current circumstances will clearly distract from the important work of the committee. I continue to reject claims of wrongdoing."

He said he will continue to work as a member of the committee.

The police said in a statement the new evidence has been "referred for internal assessment to determine whether a criminal offense has occurred."

Thomson is from the governing Labor Party, and a criminal conviction could destroy Prime Minister Julia Gillard's government. If Labor loses the seat, it would lose its parliamentary majority.

Gillard has expressed her "full confidence" in Thomson and said, "In relation to any member of parliament, I think the appropriate thing to do is for people to allow proper investigated processes if they are being undertaken to go through," as reported in the Australian.