Philip Rodgers appeared on television with Tony Blair in 2001 after the school he then ran, Dalton Foljambe primary in Rotherham, was named the most improved in the country.
He and Howard White, former head of the nearby East Dene junior school, were jailed in 2005 for defrauding their schools by giving contracts to a friend who ran a company making conservatories.
The building work, which left Mr Rodgers's school with leaky windows that his successor said were too dangerous for school use, ate into its budget to the point that Dalton Foljambe could barely afford pencils.
England's General Teaching Council, which heard both heads' cases last week, gave a tougher penalty to Mr White, who was accused of more serious fraudulent behaviour: he was suspended him from teaching for two years. Mr Rodgers received a conditional registration order, allowing him to teach on condition that he had no involvement in any schools' finances and reported to the GTC annually.
Mr Rodgers has now left teaching and works for a Yorkshire window company.
Anthony Handley, chair of the GTC committee, said that Mr Rodgers's behaviour was "a serious departure from the code of conduct" for the profession but that he should continue to be registered as a teacher.
"He has clearly demonstrated before us a positive attitude to the profession and expressed a desire to return to the classroom," Mr Handley said.
Mr Rodgers's one-year jail sentence was reduced on appeal to four months and he was released in December 2005. Mr White, who served 11 months and was released last August, said at the GTC hearing that he was "terribly sorry for the hurt, stress and embarrassment" he had caused to colleagues at East Dene junior.
He was convicted of a greater range of fraud, including taking pound;18,000 in cheques from an after-school club's bank account for "unauthorised purposes" such as paying back personal debts.
Police told a local newspaper after the court case that while a typical meal for pupils at the club was baked beans on toast, Mr White's shopping receipts for the scheme included rump steak and copious amounts of alcohol.
Mr White was also found guilty of faking New Zealand hotel receipts in an attempt to claim pound;2,000 expenses from Rotherham council for a research trip.
"I wasn't the head who followed the rule book," he told the hearing, "and that appears to be my undoing, but I believe the training given by the council was inadequate for dealing with large amounts of money."