The Glasgow-born former Labour Europe minister faces up to seven years in prison after pleading guilty to bogus expenses claims worth almost £13,000.
At the Old Bailey, MacShane's defence lawyer yesterday urged Mr Justice Sweeney to spare him "the loss of his liberty" after revealing he used the money to fund a series of trips to Europe. This included the judging of a literary competition in Paris.
He has admitted filing 19 fake receipts for "research and translation" services.
However, Mark Milliken-Smith said the former Rotherham MP's record-keeping had been chaotic.
He added: "We submit that this contrasts significantly with previous cases of an ostensibly similar ilk, and should enable the court to conclude that a sentence which does not involve loss of liberty properly reflects these distinctions."
MacShane had suffered shame, opprobrium and the loss of his life's work and reputation after he was forced to resign. But he pointed to testimonials for his work as a politician and for charity.
He also said the loss of his daughter, Clare Barnes, in a skydiving accident in 2004 would have destroyed most people.
Peter Wright QC, prosecuting, said: "He made a claim by the manufacture of false and misleading documents."
Between January 2005 and January 2008, he submitted 19 incidental expenses forms, with a total of £12,900. "It is clear, we submit, that he knew the invoices were misleading," he added.
Renewing MacShane's unconditional bail until Monday morning, Mr Justice Sweeney said he would sentence him then.
He warned: "I am giving you no indication whatever as to what the sentence is going to be."