Both interpretations of Gammy's story were possible on Tuesday as the first contact from West Australian parents David and Wendy Farnell contradicted the version of abandonment presented by the twins' natural mother, Pattharamon Janbua.

The warring versions played out as Fairfax Media confirmed court documents showing a series of 1997 child molestation charges against Mr Farnell, who was given a three-year jail term for sexually molesting two girls under the age of 10.

He had pleaded not guilty to six charges of indecently dealing with a child under 13.

West Australian child protection services were called in by police to investigate the "suitability" of Mr Farnell after the disclosure of the molestation offences.

The child molestation revelations further fuelled what has become a global story about Gammy's apparent abandonment and the difficult questions raised by the cross-border trade in surrogate children.

Foreign Affairs Minister Julie Bishop announced the federal government would be examining Gammy's case, which was labelled "tragic" by Prime Minister Tony Abbott.

It is understood an inter-departmental committee, which first met on Monday, would also look at broader issues relating to international surrogacy arrangements.

A leading surrogacy lawyer, Stephen Page, called for criminal checks in Australia before intended parents engage a surrogate overseas.

Currently Australian parents who have a child born to a surrogate in a foreign country are subject to a check by the Department of Immigration and Border Protection to determine the child's eligibility for citizenship but not whether the parents have a criminal history.

In contrast, Australian parents adopting a child from overseas or domestically must undergo strict background checks. Australian couples undergoing IVF also undergo criminal checks in Victoria.

Meanwhile, the condition of Gammy has dramatically improved since he was rushed to a hospital near Pattaya last Saturday suffering from a lung infection and what was believed to be a hole in the heart.

But a spokesman for the hospital said on Tuesday that doctors assessing Gammy reported he may not need heart surgery and will probably be able to go home in a couple of days.

On Tuesday, Gammy's surrogate mother said she wanted the girl back "because she is my baby; she was in my womb".

Ms Janbua said she was shocked by the report the father had a conviction in Australia.

"But I will leave it up to the law whether I get my daughter back … whatever happens is fate," she said.

On Tuesday, a friend of Mr and Mrs Farnell issued a statement to Fairfax Media's Bunbury Mail to give the couple's story for the first time.

As confirmation of the couple's identity emerged, media outlets camped outside the Farnells' South Bunbury home from early Monday morning.

Mr Farnell is a well-known Bunbury electrician. He has three grown-up children and is believed to have married his second wife, Wendy Li, in China in 2004.

"This has been absolutely devastating for them, they are on the edge," the family friend said. "Legally they have been told not to say anything but they wouldn't be able to anyway."

She said reports made by the Thai surrogate mother that the couple had requested an abortion when they found out Gammy had Down syndrome, and that they had subsequently abandoned the baby boy, were completely false.

The birth of the twins had been planned to take place at a major international hospital in Thailand.

But Ms Pattharamon had gone to another smaller hospital, which made the surrogacy agreement void, according to the couple.

This meant that the Farnells had no legal rights to the babies, even though they were the biological parents.

The babies were born two months premature due to medical complications. The friend said the couple was not told that Gammy had Down syndrome but they were told he had a congenital heart condition.

"Gammy was very sick when he was born and the biological parents were told he would not survive and he had a day, at best, to live and to say goodbye," she said.

Ms Pattharamon then said she wanted to keep Gammy and give him a proper Thai funeral.

The couple became embroiled in a legal battle to bring home the female twin. The 21-year-old surrogate mother finally agreed to hand the baby girl over but the couple was terrified she could change her mind.

"All this happened when Thailand was in a military lockdown and very difficult to get around," the friend said. "The biological parents were heartbroken that they couldn't take their boy with them and never wanted to give him up but to stay would risk them losing their daughter also.

"They prayed for Gammy to survive but were told by doctors that he was too sick, not because of the Down syndrome but because of his heart and lung conditions and infection."

Mr and Mrs Farnell spent two months in Thailand and extended their visas but, due to military unrest, said they had no option but to leave without Gammy.

The fallout from the case threatens an estimated 200 Australians who seek surrogacy arrangements in Thailand every year.

A spokeswoman for the Department of Foreign Affairs and Trade said: "We strongly urge Australians visiting Thailand for the purposes of commissioning surrogacy arrangements to seek private legal advice in both Thailand and Australia before doing so. They should also be aware they may be breaching Australian law in some states and territories."

with Rachel Browne and Judith Ireland