Australian lawmaker Craig Thomson's been suspended from the ruling Labor Party by Prime Minister Julia Gillard over alleged misuse of funds as a union official.

SOUNDBITE: CRAIG THOMSON, SUSPENDED LAWMAKER, SAYING (English):

"We both thought that this was in the best interest of both the government and and the people that I represent."

Thomson's suspension comes a week after parliamentary speaker Peter Slipper stood down over a sexual harassment lawsuit.

Gillard, whose grip on power is already tenuous, says public confidence in parliament has been shaken.

SOUNDBITE: AUSTRALIAN PRIME MINISTER JULIA GILLARD SAYING (English):

"Australians are looking at this parliament and at the moment they see a dark cloud over it."

Both men deny the allegations against them.

Paul Chapman, Reuters