Principal invented students in $3m fraud

A former Senior Australian of the Year has pleaded guilty to fraudulently claiming millions of taxpayers dollars for a top indigenous school.

Jean Illingworth, the former principal of Djarragun College near Cairns, appeared in the Cairns District Court on Monday where she pleaded guilty to fraud and obtaining property by deception.

The 67-year-old admitted to inflating student numbers to obtain $3.4 million in extra state and commonwealth funding for the school in 2010 and 2011.

Illingworth entered the guilty plea moments before her five week trial was due to begin.

She was released on bail and will be sentenced in the same court on Friday morning.

Prosecutors dropped all other charges against Illingworth, including claims she attempted to pervert the course of justice and breached bail conditions by contacting Crown witnesses, after she admitted to the two more serious charges.

Illingworth spent nearly a year in jail for pre-sentence custody before she was released earlier this year. It's unlikely she'll spend more time behind bars.

She made no comment when she left court flanked by supporters.

Her barrister Ken Fleming said his client was relieved, although he wouldn't comment on her eleventh-hour plea.

"It has taken an enormous toll on her but that's as far as I can go," he told reporters in Cairns.

"She's spent a year in prison."

During a bail application last year Illingworth's former lawyer, Tony Kimmins, told a Cairns court she lived with anxiety and wasn't coping well behind bars.

Illingworth, who worked at the college for about a decade, was named the Queensland Senior Australian of the Year in 2009 for her work in transforming the once dysfunctional college into a much admired model of success.

The school has since been taken over by Noel Pearson's Cape York Partnerships organisation.

Illingworth was stood down as principal after police investigations began in 2011 and she was formally charged last year.