Former Labour MP Margaret Moran has been given a two-year supervision and treatment order for fiddling expenses to receive more than £53,000 from the taxpayer.

Moran, 57, who represented Luton South for 13 years, claimed nearly her entire annual allowance in one bogus expense entry and forged invoices for more than £20,000 for non-existent goods and services.

The disgraced former MP's claims were the largest amount uncovered in the wake of the MPs' expenses scandal, but she does not receive a criminal conviction after a judge ruled she was unfit to stand trial for mental health reasons.

She was sentenced at Southwark Crown Court to a two year supervision and treatment order, to be supervised by Southampton City Council. Mrs Moran was not present at Southwark to hear Mr Justice Saunders make the ruling.

He said: "There will inevitably be feelings among some that Mrs Moran has 'got away with it'. What the court has done and has to do is to act in accordance with the law of the land and on the basis of the evidence that it hears."

The judge said two distinguished psychiatrists instructed by the defence had concluded she was unfit to plead, and a psychiatrist instructed by the prosecution broadly agreed. He added: "The findings of the court were not convictions. Those findings enable me to make orders requiring her to undergo treatment for her mental health."

Dr Simon Kelly, from the Priory Hospital in Southampton, said that he last saw Moran on Tuesday: "She remains very distressed, very agitated, she is severely ill. She is unable really to process information that is presented to her. She's living a restricted lifestyle, she's not answered the telephone at home for approximately three years, she goes out very occasionally, to a local supermarket for 30 minutes."

Asked how she would have reacted if she had to come to court, he said: "She is so sensitised to publicity, this would have been the most difficult place for her to come. I wonder physically whether it would be possible to get her here. I don't know whether it would be physically possible to remove her from her home without restraining her."

Jim Sturman, representing Mrs Moran, said: "The more vengeful press, who hound her at her front door, seem to think that the only way someone can be demonstrably mentally ill is if they are in a straitjacket in a padded cell. The reports back in April all agree that she suffers from this mental illness. Hounding a mentally ill woman is a dangerous and vile thing to do, at any time, particularly post the Leveson conclusions."

Mr Sturman said he was making these observations on behalf of Mrs Moran's husband. The judge said the order would be under the supervision of a mental health social worker employed by Southampton City Council, and Mrs Moran would be treated by Dr Kelly, with a view to the improvement of her medical condition.