Ms Roxon announced on Friday that the federal government had come to a $50,000 settlement with Mr Ashby over his claims that he was sexually harassed by Mr Slipper.

Mr Slipper stood down from his role as speaker of the house in April while charges of fraud and sexual harassment were investigated. He will now fight Mr Ashby's sexual harassment allegations without the support of the Commonwealth.

His lawyers had been working in parallel with the government's to have Mr Ashby's case thrown out on the grounds it was an abuse of process and vexatious.

Ms Roxon said on Friday that the Commonwealth had settled with Mr Ashby because she feared it would turn into a "lawyers' picnic" and be too costly to the taxpayer.

Through a spokesman Mr Ashby said he was considering defamation and contempt of court action against Ms Roxon because she had repeated her allegation that the case was vexatious.

Yesterday Ms Roxon stood by her comments. "The Attorney's statement accurately reflects the facts of the matter," a spokeswoman said.

"It's a bit rich for Mr Ashby to make such claims following his conduct and the conduct of his lawyers. We only had to see Mr Ashby rushing out to make statements through his publicists. This meant the Commonwealth needed to make a public comment."

Mr Ashby's case against Mr Slipper will be heard in court on Tuesday.

If that case was settled it would leave the allegations of misuse of Cabcharge entitlements the only issue preventing Mr Slipper from returning to the speakership.