Senator Madigan has dismissed the claims as "vexatious" and brought by "bitter" former employees as he severed ties with the DLP in a surprise speech to the Senate on Thursday.

The explosive claims were made by Steve Campbell, who quit as Senator Madigan's chief of staff in January.

Incensed that Senator Madigan had accused a female staffer of treachery under the cover of parliamentary privilege, Mr Campbell spoke to Fairfax Media and promised to provide a paper trail of emails to back up his claims.

Mr Campbell said that during his time leading Senator Madigan's office he had covered more than $10,000 in costs out of his own pocket for events promoting Australian manufacturing.

He paid out $5000 to a Canberra marquee provider for an event hosted by the Madigan-backed Australian Manufacturing and Farming Program in August 2012.

It took him 10 months to recoup the money.

Mr Campbell said that two months after he had quit Senator Madigan's staff, the Senator paid back a further $6000 but only after a threat that the matter would be taken to the Victorian Small Claims Tribunal.

Senator Madigan told Fairfax Media: "When he asked me for the money he got the money back, simple as that. It's a very busy office. When he left he put in a claim for money and as soon as I had it available to give it to him I gave it to him."

On the East Timor promise, made during a trip to the island nation with the charity the Order of Malta in April 2013, Senator Madigan said plans had been drawn up and steel would be delivered to his blacksmith workshop next week for galvanising and welding.

"You have to work around the wet season in a country like that," he said.

On his return from East Timor, Senator Madigan told a newspaper: "You can make such a difference to their lives with a just a bit of effort."

Mr Campbell said staff members had been "really upset" that the orphans still had no kitchen nearly 18 months on.

In quitting the party, Senator Madigan said the "cancer of political intrigue" had infected the Victorian state executive of the DLP. He claimed a staff member, Rachel Carling-Jenkins, had been planted in his office by the party to undermine him, leading to his decision to leave the party.

He tabled emails from Dr Carling-Jenkins in which she described herself as a an "informant" and "spy" for the DLP.

She did not return calls.

Senator Madigan has pledged to serve the final three years of his term as an independent.

But furious DLP officials demanded he give the precious Senate seat back to the party they say he has betrayed.

They said there has been growing angst at Senator Madigan's performance in Parliament and a perceived failure to forge a media profile anything like that of independent Nick Xenophon, the Palmer United senators or even his fellow Victorian crossbencher Ricky Muir.

The final straw came when Senator Madigan abstained from the vote that ended the mining tax on Tuesday.

The DLP was the first party to pledge opposition to the carbon and mining taxes but it has not been seen as part of the crusade against them since Senator Madigan arrived in Canberra in 2010.

DLP national president Paul Funnell said Senator Madigan's mind had been "poisoned against the party" by his new chief of staff Brendan Gullifer.

"John Madigan has betrayed the party. . . it's shocking and I'm just sickened by it," he said.

He said his friend had become "addicted to power" and "turned his back on the people who had put him there, he has dumped on all those people in the DLP who have nothing and supported him to get elected".

And he called for Senator Madigan to leave Parliament and give back his seat to the DLP: "As far as I'm concerned it belongs to the DLP."

Former staffer Clare Geoghegan said Senator Madigan had "dropped the ball" on key DLP pro-life issues and was invisible during recent debates on surrogacy and same-sex marriage.

She defended Ms Carling-Jenkins' emails as "tongue in cheek".

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