"As a serving prisoner, my income is $2.70 per week, so I'm auctioning the 'Shirt Off My Back (plus tie)' to defray costs.
"I'm counting on Christmas spirit in bids."
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But TradeMe said the auction was pulled at 8.33pm after having been on the site for six hours.
Spokesman Logan Mudge said: "We take a lot of factors into consideration when deciding whether someone should be trading on site, and being an incarcerated prisoner is a bridge too far for us.
"Also our community always provides us with a good temperature check and we received a bunch of complaints about this one."
Earlier, Auckland Prison director Tom Sherlock said the auction did not cross any boundaries when it came to inmates benefiting from the proceeds of crime - which is illegal.
"This auction does not break any prison rules," he said.
"Prisoners are able to mail out their personal property."
He confirmed the auction appeared to have been "created from one of Mr Taylor's associates outside of prison".
The court hearings Taylor has worn the shirt to include a case against former-Prime Minister John Key, and another against the Attorney General where he successfully argued that the 2010 law forbidding all prisoners voting was Inconsistent with the New Zealand Bill of Rights Act .
After a number of cases Taylor has taken to court during his current stint behind bars, the Crown sought costs of more that $50,000.
On the auction page Taylor said the courts had "whittled" the amount down to $8000.
"Thank you, Arthur Taylor, A Block, Auckland Prison," the description is signed off with.
As an inmate, Taylor has no access to the internet.
However, he relies on family and associates on the outside to post on his behalf.
The TradeMe user name of account that the shirt is being sold from is jailhouselawyer - which Taylor has come to refer to himself as over the years.
Last month Taylor was declined parole for the 17th time.
Before the hearing the Herald revealed Taylor planned to study towards a formal legal qualification when he is released with a view to helping people who cannot afford lawyers.
Taylor has more than 150 convictions for offences including bank robbery, burglary, fraud and drugs.
He has been behind bars on and off for 38 years and is currently doing his time at Auckland Prison.
Taylor became infamous in 1998 after he escaped from the maximum security prison at Paremoremo north of Auckland.