Gammy's biological parents left him with his Thai surrogate mum but took his twin sister (Hope for Gammy)

SYDNEY (Reuters) - The Australian biological parents of twins caught up in a surrogacy scandal in Thailand wanted both babies but the surrogate mother threatened to involve the police and they feared she would keep both children, they said on Sunday.

David and Wendy Farnell were speaking publicly for the first time since the story broke more than a week ago of 7-month-old baby Gammy, who has Down's syndrome and is being cared for by his surrogate mother in Thailand.

The couple told Australian television they felt they had little choice but to leaveThailand with Gammy's healthy sister.

"We wanted to bring him with us," David Farnell, 56, told the Nine Network’s 60 Minutes program.

They returned to Australia with Gammy’s sister Pipah as the surrogate motherPattaramon Janbua had told them “if we try to take our little boy, she’s going to get the police and she’s going to come and take our little girl… and she’s going to keep both of the babies,” he said.

The couple have been criticized for apparently rejecting the boy, who also has a hole in his heart and is being treated for a lung infection in a Thai hospital.

60 Minutes said the couple were not paid for the interview.

Pattaramon said doctors, the surrogate agency and the baby’s parents had known that Gammy was disabled when she was four months pregnant but had not told her until the seventh month.

She said she had feared she would be asked to abort him but would have refused due to her Buddhist beliefs.

The Farnells said they were angry that the agency had not told them about the boy's condition until too late in the pregnancy to safely abort.

They said they want the baby.

The case has drawn international attention to the lack of regulation of international surrogacy and sparked calls in Australia for an overhaul of laws to cut the number of couples traveling abroad for surrogates.

Public outrage intensified last week when it became known that David Farnell was jailed in 1997 for sex offences involving three girls aged under 13.

"I have been convicted of child sex offences and I hang my head in shame for that," he told 60 Minutes, adding that he had reformed and was no longer a risk to children.

As commercial surrogacy is outlawed in Australia many couples turn to clinics inThailand and India.

Thailand has no clear legal framework for surrogacy. Commercial surrogacy is barred by the Medical Council of Thailand but non-profit surrogacy is permitted for blood relatives, and exceptions are permitted on a case-by-case basis.

A draft law banning commercial surrogacy in Thailand has been submitted to the military government, an official of the Social Development and Human Security Ministry said on Thursday.

The Australian government has asked the Thai authorities to allow for the completion of any current commercial surrogate arrangements before introducing changes.

Hands Across the Water, an Australian-run children's charity based in Thailand, will administer the more than A$241,000 ($224,000) raised so far in an online public appeal for Gammy’s medical treatment and care.