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Ms MacDonald, who died in 2014, had long campaigned for councils to be able to designate "tolerance zones" as a way of managing street prostitution and increasing the safety of sex workers, arguing moves to criminalise their trade would make it more dangerous by driving it underground.
However, at the end of 2005 she had withdrawn her own Bill, which asked the Scottish Parliament to approve such powers, and instead gave her support to "more comprehensive" proposals from the coalition government.
It was proposed to use a new Sentencing Bill to include changes to existing legislation and focus on the nuisance or harm related to street prostitution, whether caused by the seller or the purchaser, but also making clear the duty of care which councils had towards both prostitutes and the wider community.
The Cabinet meeting at Bute House on June 21, 2006 agreed to reduce the scope of their proposed Sentencing Bill because they feared it could be hijacked to introduce laws on a wide variety of issues.
The minutes say the Bill would now deal only with the release of offenders and knife crime.
"This was to reduce the cope of the Bill, which had previously been vulnerable to amendments on a a wide range of criminal justice matters.
"The removal of the provisions on street prostitution was a significant issue, both because it was the subject of a Partnership Agreement commitment, and also because a separate commitment had been given to Ms Margo Macdonald MSP, who had subsequently dropped her Member’s Bill on the subject.”
The minutes went on to say that a Bill on street prostitution should be brought forward in that session sand all efforts should be made to enact it before the next election.
The Prostitution (Public Places) (Scotland) Act was passed the following year, making kerb crawling a criminal offence.